DC Retirement Plan Balances and Contributions Rising, Fidelity Reports

Retirement account balances have reached all-time highs, Fidelity Investments reported, with an average of $132,300 in 401(k)s and $119,300 in 403(b)s in the latter half of 2024. The company also noted that average overall contribution rates are increasing, nearing Fidelity’s guideline of saving 15% per year for retirement (including both employer and employee contributions).

Additionally, workers increasingly value the options; more than two-thirds (69%) of employees and 67% of employers endorse retirement plans as a must-have employer benefit, according to Fidelity’s 2025 workplace outlook report.

In 401(k) plans, the Fidelity data highlighted that employers are adding 4.7% of pay to the plan, with employee deferrals of 9.4%, combining for a total average contribution of 14.1%. In 403(b) plans, Fidelity reported that employers are averaging a 3.3% contribution, with employee contributions of 8.5%, totaling an average of 11.8%.

However, behind the overall averages are some significant differences by industry. The industry with the highest total combined savings rate of 19.4% was pharmaceuticals, while the industry with the lowest combined rate was retail trade, at 10.3%.

Employer Contribution and Match Designs

According to data from the third quarter of 2024, Fidelity found that the most common 401(k) match formula is a safe harbor design—a 100% match on the first 3% and a 50% match on the next 2% of pay. The second most common match formula was a 100% match on the employee’s first 4%.

For 403(b) plans, the most common match formulas were 100% on the employee’s first 6%, followed by 100% on the employee’s first 5%.

Many participants are not receiving the full employer contribution. According to the report, 51% of Black employees, 45% of Latino employees and 43% of multiracial employees are not getting the full retirement match from their employers. These employees exhibited the highest likelihood of remaining at a plan’s default deferral rate for extended periods, Fidelity found, as this may be viewed as their employer’s “suggested” savings amount.

Kirsten Hunter Peterson, vice president of thought leadership at Fidelity, says a way for employers to address this issue would be to automatically enroll participants at the full match rate.

“For example, if an employer’s plan offers a 6% match, they should consider auto-enrolling participants at 6% to start,” Peterson says. “Instead, what often happens is that participants are auto-enrolled at, say, 3% or 4%, even if their match is higher, and participants don’t proactively go in and increase that deferral on their own or enroll in an automatic increase program. … They’re effectively leaving money on the table.”

Peterson says if employers were to set the automatic deferral rate to the level at which participants would earn the full plan match, it would enable more than eight out of every 10 Black and Latino employees to earn the full match.