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U.S. Master Pension Guide, 2012 Edition
Part of CCH's Master Series of professional guidebooks. The book provides a comprehensive explanatory overview of qualified retirement plans and other retirement arrangements, reflecting up-to-date law changes and regulations. Benefit COLAs, calendars, and tables reflect the year 2012 figures.
from Spencer’s Benefits Reports: In 2008, 55.1% of all 401(k) plans and 70.5% of 401(k) plans with 1,000 or more employees now permit immediate participation, according to the Profit Sharing/401(k) Council of America (PSCA). The 401(k) and Profit Sharing Plan Eligibility Survey 2008 found that this figure has more than doubled since 1998, when only 24% of plans allowed employees to begin contributing to their 401(k) plans immediatley upon employment. Employees are eligible to participate within the first three months of employment at 72.7% of companies and at 87.2% of large companies (those with 1,000 or more employees). Only 14.7% of all plans have a one-year or longer service requirement prior to eligibility.
According to the survey, 97.7% of the plans permit employee contributions to an employer-sponsored defined contribution plan, and 78.5% of the plans offer employer matching contributions. In addition, 54.9% of the responding companies make nonmatching contributions.
For both matching and nonmatching contributions, there is a trend away from one-year eligibility requirements, although significantly more companies require one year or more of service to be eligible for nonmatching contributions. In 2008, only 29.3% of companies required one year of service or longer for matching contribution eligibility; while 49.3% of employers require one year or more of service to be eligible for nonmatching company contributions.
A large percent of plans have no minimum age requirement for participant deferrals (42.8%) or for nonmatching company contributions (42.7%). Age 21 is the most prevalent minimum age requirement (used by 33.8% of plans), although 22.6% of plans require an employee to be age 18 before the employee can contribute to the plan.
In the fall of 2008, the PSCA collected defined contribution plan eligibility data from 531 companies. Responding companies represent a diverse range of sizes, industries, and geographic locations. Data was collected for three different eligibility categories: participant deferrals, matching company contributions, and nonmatching company contributions. For more information, visit http://www.psca.org.
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