Kansas City, Kan. – Most U.S. employees know they should save more for retirement. However with the personal savings rate at negative .5 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 2007 Compensation Data - Southwest survey of 170 companies, 98.2 percent of organizations in Arizona, New Mexico and Nevada offer a solution in the form of pension plans.
Southwestern organizations offer a variety of savings options. Of those reporting, 64.6 percent of companies offer defined contribution plans only. Additionally, 30.5 percent offer both defined benefit and defined contribution plans to their employees.
When comparing defined contribution plans, 83.3 percent of organizations offer a 401(k) plan with employer contribution. In addition, 5.8 percent of organizations offer 403(b) plans with employer contribution. Profit sharing is offered by 16 percent, while ESOP plans are provided by 11.5 percent in Arizona, New Mexico and Nevada.
Full vesting in 401(k), 403(b) and 457 plans happens immediately in 24.1 percent of companies and after five years in 32.3 percent of organizations. These numbers have remained consistent over the last three years. In contrast, the majority of organizations, 47.2 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 – Southwest contains data on 514 job titles ranging from entry-level to top executives. Information was collected on more than 252,000 employees across the region. The results provide a comprehensive summary of pay data, benefits information and pay practices with an effective date of March 1, 2007. Compdata Surveys, www.compdatasurveys.com, has been providing accurate, reliable data at affordable prices since 1988. For further information about the compensation and benefits surveys, contact Lane Odle at (800) 300-9570 or lodle[at]compdatasurveys.com.
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