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Data & Research January 17, 2007
Workers Gain Plan Eligibility More Quickly
New employees are being allowed to get up to speed in their company’s 401(k) plan more quickly than a year ago, according to a new survey.
Reported by Fred Schneyer
A news release from the Profit Sharing/401k Council of America (PSCA) said its eligibility “mini survey”, which covered 427 profit sharing and 401(k) plans, found 69% of 401(k) plans allowworkers to start saving their own money within three months of being hired. That is up from 65% a year earlier.
The PSCA said fast eligibility for deferrals is even greater in large companies with 1,000 or more employees, where 85% of companies offer eligibility within 90 days – up from 79% a year earlier.
According to the news release, eligibility periods have improved slightly for company contributions. Some 49% of plans provide eligibility for company matches within the first three months, up a tick from 48% a year earlier. Additionally, 25% of plans provide eligibility for company profit sharing contributions within the first three months – up from 24% last year.
Among plans with 1,000 or more employees, 61% provide eligibility for matching contributions during the initial 90 days and 35% provide eligibility for employer profit sharing contributions during employees’ initial three-month period.
More information about the PSCA is at http://www.psca.org.