Employee and employer contributions to 401(k) plans edged slightly higher in the second quarter, according to Fidelity Investments’ analysis of its 11.9 million 401(k) accounts.
Employees contributed an average of $1,660 to their accounts during the second quarter, while employers kicked in an average of $950. That’s an increase of $30 for both employees and employees from the year-ago quarter. From the second quarter of 2009, the increase is more impressive: employees contributed $150 more, while employers threw in another $90.
“Rising contribution levels from both employees and employers show a strong commitment that both have to workplace savings plans,” James M. MacDonald, president of Workplace Investing at Fidelity Investments, said in a statement.
The Fidelity analysis also showed an uptick in the number of employers offering Roth 401(k) savings plans—35% of employers, up from 10% five years ago. The adoption of the savings option also increased among Fidelity 401(k) participants. More than half (55%) are in plans that offer a Roth 401(k), up from 15% five years ago.
Fidelity found target-date funds and Roth 401(k) plans to be more popular among Gen Y participants than other age groups. Among plans that offer target-date funds as investment options, half (51%) of Gen Y participants had 100% of their assets in target-date funds. In contrast, the participation rate in such funds across all ages is 30%, according to the analysis.
Gen Y participants were also more likely to go for the Roth 401(k) savings option with 8.8% contributing to them versus 5.8% among all active participants.
The findings are consistent with a
Margarida Correia is an associate editor with