Dive Brief:

• While 401(k) plan balances and participation are at record highs, a new survey from Aon Hewitt reveals that few U.S. workers are actively managing their 401(k) portfolios.
• According to Aon Hewitt's analysis of 138 defined contribution (DC) plans, representing 3.5 million eligible workers, participation in 401(k) plans reached 79% at the end of 2014, the highest level since the firm began tracking this data in 2002.The average plan balance also hit an all-time high of $100,320, up notably from $91,060 at the end of 2013.
• Only 15% of workers rebalanced their portfolio in 2014, making it one of the lowest trading years on record, according to the survey.

Dive Insight:

The Aon Hewitt survey clearly signals there is a serious opportunity for workers to be more proactively involved in their accounts and improve long-term savings. "In the last decade, employers have made strides in helping workers prepare for retirement by adding plan features that make saving and investing easier," explains Rob Austin, director of Retirement Research at Aon Hewitt. "At the same time, employees continue to take a passive role in managing their 401(k) plans. Employers can nudge workers in the right direction by providing more robust products, tools and resources."

Austin recommends three areas for employers looking to get workers more involved. They include offering better acccess to help tools so they can fare better than those who go it alone, simplifying the fund lineup and considering lifetime income options which can can help ensure that retirees do not outlive their retirement savings and may remove the need for participants to actively rebalance their portfolios. 

"Encouraging lifetime income is important to many employers, though it's primarily leading-edge companies that are implementing these options for their workers," Austin says.