New report flashes a warning light over 401(k) account balances | CNN Business

. That’s according to the latest annual report, “How America Saves,” from investment firm Vanguard, which serves as record keeper for defined contribution plans that, combined, have nearly 5 million participants with a median age of 43. Such plans include 401s and 403s, as well as a much smaller universe of plans that employers simply put money into for employees and then employees direct how that money is invested.

But more than a third of employers offer not only a matching contribution but also a nonmatching contribution, meaning they put money into an account on behalf of eligible employees whether or not they are saving themselves. These often take the form of fixed- or variable-rate profit-sharing payments. “Among plans with a nonmatching employer contribution, the average contribution was equivalent to 5.1% of pay; the median contribution, 4.1% of pay,” Vanguard noted.

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