US employees have been saving into company defined contribution plans at an all-time high, helped largely by automatic enrolment, research by human resources consultants Aon Hewitt has found.
The 78% participation rate in 2012 was the highest level since Aon Hewitt began tracking the data in 2002, when 68% of workers were saving in such pension schemes.
DC plan balances have bounced back to pre-recession levels, averaging $81,240, the 2013 Universe benchmarks report found. In 2008 the figure was $57,150.
Employee saving rates remained flat, averaging 7.3% before tax. Aon Hewitt said this suggested work was needed to help workers achieve retirement security.
Improved participation was driven by the increased proportion of employers who automatically enrol workers in their DC plans, up from 34% in 2007 to 59% today. The participation rate for employees subject to automatic enrolment was 81.4% versus 63.5% where joining is voluntary.
Patti Balthazor Bjork, director of retirement research at Aon Hewitt, said the impact of automatic enrolment had been 'astounding'.
She said: 'Companies are definitely moving in the right direction when it comes to encouraging financial wellness among their workers, but there is certainly opportunity to do more.'
While most individuals were using their employers' DC plan as their primary retirement vehicle, the report noted that employees continue to lack involvement in their plans.
Aon Hewitt recommended increasing automatic default contribution rates, stretching employers' matching contributions, and using social media to educate employees about retirement savings to further boost participation and savings rates.
The company analysed more than 140 DC plans representing 3.5 million eligible employees. The average eligible employee is 43 years old, earns $57,890 annually and has 9.4 years of tenure.