While we’re still waiting for exchange traded funds (ETFs) to become fully incorporated into 401(k) plans everywhere, there are still four pieces of good news about the industry we have to share.
Good News 1: Balances Are Up. The average 401(k) balance is up 13.5% in the second quarter, indicating a lean toward more investors raising their deferral savings rates, according to Fidelity Investments. Money Management Executive for Financial Planning reports that this is a reversal of trend seen in the prior three quarters. Only 1.3% of plan participants lowered their contributions, down from 2.2% in the fourth and first quarters.
Good News 2: Matches Being Restored. The majority of employers plan to restore their 401(k) match programs within the next 18 months, according to Money Management Executive. The survey found that 64% of employers plan to do so; broken down, 5% plan to within the next six months; 43% in the next 12 months and 16% in the next 18. Of those who said they would restore the matches, 67% said they would be back to their previous levels while 21% will tie them to corporate profits.