BALTIMORE, June 30, 2020 /PRNewswire/ -- T. Rowe Price
Retirement Plan Services, Inc. released today Reference
Point, its annual benchmarking report featuring data and
analysis related to 401(k) participant behavior and plan design,
based on the firm's full-service recordkeeping client data for
2019.
T. Rowe Price's focus on
participant data and engagement is core to its offering. The firm
provides these metrics to deliver insights that help plan sponsors,
advisors, and consultants track plan performance, benchmark
progress, and implement strategic plan design features to deliver
outcomes that benefit participants and their retirement savings
outcomes.
Kevin Collins, head of Retirement
Plan Services said, "The report analyzes past data to help our
clients plan for the future and to guide participants toward better
retirement outcomes. This year is different, of course; as we
dissected the data from 2019, we could not ignore these changes we
have experienced so far in 2020. The coronavirus pandemic affected
the way we live, the way we work, and even the way we interact with
our clients and the retirement plan participants we serve."
While 2020 could influence or even reverse some of the
retirement plan trends identified in the 2019 report, the company
summarized the following findings related to participant behavior
and plan design:
- Plan participation was greater than 79%
- Over 61% of plans at T. Rowe
Price automatically enroll participants, with 37% enrolling
at a 6% default deferral
- Average account balances rose to over $100,000, an increase of 8%, although over 34% of
eligible participants did not contribute to their plans in
2019
- Employers are increasing match formulas from 3% to a 4% to 5%
effective match rage
- Direct rollovers of plan assets increased to 76% in 2019 from
74% in 2018
- Participant usage of loans decreased in 2019 to 22.1%, down
from the seven-year high of 24.9% in 2013, but the optional loan
provisions included in the Coronavirus Aid, Relief, and Economic
Security (CARES) Act could change that trend
- Allocations to company stock investments increased more than
11%.
Collins added, "We recognize the financial strain of the
coronavirus pandemic could have repercussions long after 2020. We
know that life evolves and priorities change, and we continue to
see—now more than ever—the importance and significant impact plan
design and financial wellness programs have on keeping participants
on track with their financial priorities."
ABOUT REFERENCE POINT
Reference Point is an annual
client data benchmarking report so plan sponsors can review trends
and benchmark their progress and participant behavior across the
firm's client base. Data are based on the large-market,
full-service universe of T. Rowe Price Retirement Plan Services,
Inc. retirement plans (401(k) and 457 plans), consisting of 677
plans and over 1.9 million participants, from January 1, 2019 through December 31, 2019. T. Rowe Price Plan Services,
Inc. has been a retirement solutions provider for more than 30
years.
ABOUT T. ROWE
PRICE
Founded in 1937, T. Rowe Price (NASDAQ-GS: TROW) is an independent
global asset management company with $1.19
trillion in assets under management as of May 31, 2020. The organization is focused on
delivering investment excellence and retirement services for
institutional and individual investors. Our strategic investing
approach, driven by independent thinking and guided by rigorous
research, helps clients feel confident in pursuing financial goals.
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SOURCE T. Rowe Price Group, Inc.