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Emerging Plan Design Trends from 2023

May 9 2024

What’s the most popular employer match formula? Is loan activity increasing or decreasing? What about the usage of auto features and Roth contribution options? T Rowe Price’s 2023 Reference Point offers a comprehensive look at emerging plan design trends that can help inform efforts to keep your plan competitive or benchmark your employee usage of current plan features.

Employer Match

The likelihood of a plan offering a match was higher in plans with more employees:

Plans with > 5,000 employees:            90%
Plans with 1,000 – 5,000 employees:  86%
Plans with < 1,000 employees:            72%

A new most popular match formula emerged in 2023: 100% up to the first 3% of pay + 50% up to the next 2% of pay.

Most plans stop matching at 6% of an employee’s contribution; 4% is the most common maximum for employer match across match formulas. In addition, data shows that offering a match could improve retention. Plans with a match experienced a 6.2% termination rate in 2023, versus 8.4% for plans without a match.

Roth Option

Plan adoption of Roth contributions reached an all-time high of 93% in 2023, up from 83% in 2021. The percentage of employees making Roth contributions continues to grow as well (14% in 2023, up from 12% in 2021). Participants ages 30-39 showed the highest utilization of a Roth option in 2023 (18%), followed by those ages 40-49 (15%) and those ages 20-29 (14%). For all age groups, the average Roth deferral rate was 6.8% in 2023.

Auto Services

Adoption of auto services continues to increase as these services produce results for plans. Plan adoption of auto enrollment was at 87% in 2023, up nearly 4% from 2022; adoption of auto increase was at 68% in 2023, up nearly 2% from 2022. A default rate of 6% or more continued to be the most common in 2023 (38% of plans), followed by 3% (26% of plans). A target date product is the default investment option for 99% of plans.


In 2023, 92.1% of plans offered a loan and 41% of plans offered multiple loans. Those percentages have remained fairly level for the past several years. The number of participants with an outstanding balance reached 19.4% in 2023, an increase of 6% from 2022. In addition, 68% of participants had taken out just one loan within the past 5 years, while 32% have taken out multiple loans. The average new loan amount in 2023 was $9,953, compared to $9,837 in 2022. Although loan rates increased in 2023, loan defaults declined for the third year in a row.

Hardship Withdrawals

Hardship withdrawals increased across all age groups from 2022 to 2023, which could highlight the need for financial wellness support. In 2023, the average withdrawal was $6,379 and the average number of withdrawals was 1.4. The biggest increase came from participants in their 50s, who experienced a 22% increase in both their average hardship amount and the number of hardship withdrawals taken per person.

Participant Engagement

Participants engaged with educational resources related to investing more than any other topic throughout 2023. Interest in financial wellness content also increased. As part of the survey, respondents self-reported their barriers to saving through a financial wellness assessment. The biggest savings barriers in 2023 were mortgages (20%), credit cards (20%) car loans (17%) and student loans (11%). 

Informational Resource: T Rowe Price: Reference Point 2023 (April, 2024)

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