Kansas City, Kan. – Most U.S. employees know they should save more for retirement. However with the personal savings rate at negative 1.4 percent (www.bea.gov/newsreleases/national/pi/pinewsrelease.htm), individuals are spending more than they earn, depleting their savings and increasing debt. The task of creating a substantial savings account can be daunting, but according to the preliminary results from the Compensation Data 2007 survey, 97.4 percent of organizations offer a solution in the form of pension plans.
Organizations offer a variety of savings options. Of those reporting, 61.6 percent of companies offer defined contribution plans only. Additionally, 32.6 percent offer both defined benefit and defined contribution plans to their employees.
When comparing defined contribution plans, 80.4 percent of organizations offer a 401(k) plan with employer contribution. In addition, 7.8 and 1.4 percent of organizations offer 403(b) and 457 plans with employer contribution. Profit sharing is offered by 21.1 percent, while ESOP plans are provided by 8.6 percent.
Full vesting in 401(k), 403(b) and 457 plans happens immediately in 21.9 percent of companies and after five years in 30.7 percent of organizations. These numbers have remained consistent over the last three years. In contrast, the majority of organizations, 53.4 percent, providing other pension plans require five years of service for full vesting.
"There are a variety of strategies for saving for retirement. Despite their differences, each consistently gives one piece of advice regarding retirement, which is to start saving now," said Amy Kaminski, manager of marketing programs for Compdata Surveys, the nation’s leading compensation and benefits survey data provider. "With Social Security’s future uncertain and increased health care costs, employees should take advantage of plans offered by their employers to help ensure their financial security."
About the Survey
Compensation Data 2007 contains data on 539 job titles ranging from entry-level to top executives. Annually, more than 5,000 organizations participate in the survey. The results provide a comprehensive summary of pay data, benefits information and pay practices with an effective date of March 1, 2007.
Compdata Surveys is the nation’s leading compensation and benefits survey data provider. Compdata Surveys has been providing accurate, reliable data at affordable prices to organizations from coast to coast since 1988. For further information about the compensation and benefits surveys, contact Lane Lyons at (800) 300-9570 or llyons[at]compdatasurveys.com.
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