Most Companies Fail Workers on Automatic Enrollment, Hikes in 401(k)s
NEW YORK (TheStreet) -- U.S. 401(k) plan participants are doing a good job plowing cash into their retirement plans, but they would do better if employers stepped up as well.
Boston-based Fidelity Investments says 401(k) plan contributions are up 9% from the first quarter of last year, to an average plan balance of $88,600 from $80,900.
Sure, the U.S. stock market was up 29.6% last year, its highest run-up in 16 years, and with most 401(k) plans invested heavily in the stock market, heftier gains will help push plan assets up.
But it does appear Americans are putting more faith -- and dollars -- in their 401(k) plans. Fidelity says assets are way up over a five-year period that included some years where market growth was mixed. (In 2009, average plan assets were $46,200, marking the bottom of the economic meltdown.)says Julia McCarthy, an executive vice president at Fidelity. But while employees are largely holding up their end of the bargain, Fidelity says there is room for improvement from employers. According to the firm's research, only 26% of U.S. companies enroll their staffers in 401(k) plans automatically when they're hired. That's a problem, as Fidelity says automatic enrollment is a huge trigger for 401(k) plan participation.
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