Plan sponsors are becoming more aggressive about helping their workers save for retirement, and even investment advice is now offered, Hewitt Associates found in a survey of 300 mid- and large-sized companies.

More sponsors are offering target-date funds, educational tools or advice, automatically enrolling their employees, and actively looking to lower plan expenses and/or offer low-cost choices. They are also focusing more on savings rates and performance.

Fifty percent now offer outside investment advisory services, up from 40% in 2007 and 37% in 2005. Twenty-nine percent offer one-on-one financial counseling, and 28% have online guidance, up from 22% and 18%, respectively, in 2007.

Fifty-eight percent automatically enroll employees into their 401(k) plan, up from 34% that did so in 2007. Of these automatically enrolled 401(k) plans, 69% use target-date funds as the default, up from 50% in 2007. Overall, 78% of all plans offer target-date portfolios, up from 58% in 2007 and 28% in 2005.

Eighty-nine percent use 3% or higher as the default contribution rate, up from 83% that did so in 2007. Forty-four percent use automatic contribution escalation, up from 35% two years ago and a mere 9% in 2005. In addition, 47% use automatic rebalancing, compared to only 26% in 2005.

Eighty-four percent of employers attempted to calculate the total cost of their 401(k) plan this year, up from 60% that did so in 2007 and a mere 29% that tried in 2001.

“Over the past decade, design changes in 401(k) plans have generated many positive improvements in certain employee investment behaviors and participation rates, but there’s still work to do,” said Pam Hess, director of retirement research at Hewitt. “This means reviewing appropriate default contribution rates and investment funds, and considering coupling automatic enrollment with other targeted tools and targeted education that forces employees to save an invest more wisely.”

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