More employers prefer making their defined contribution plan immediately available to new hires instead of requiring them to wait three months before enrolling in the plan, reports the Profit Sharing/401k Council of America.

In its 12^th annual survey on DC plan eligibility, the Chicago-based group reports that, in 1998, 24% of plan sponsors permitted employees to begin contributing to their 401(k) plans immediately upon employment. Eleven years later, that number has increased to 57.4%, with 71.1% of plans with 1,000 or more employees allowing immediate participation in their 401(k) programs. The survey, which defines immediate eligibility as one month or less of service, reflects data from 494 companies.

“This trend toward earlier plan eligibility is yet another demonstration of employers’ continued commitment to their DC plans and to helping their employees save for retirement,” says David Wray, president of PSCA.   

Other highlights from the 2009 survey include:

• Nearly 97% of the plans permit employee contributions to an employer-sponsored DC plan, and 72.3% of the plans offer employer matches.

• Employees are eligible to participate within the first three months of employment at 75.8% of companies and at 85.5% of large companies (1,000 or more employees). Only 11.5% of all plans have a one-year or longer service requirement prior to eligibility.

• In 2009, only 28.5% of employers required one year of service or longer for matching contribution eligibility, while 47.1% of employers required one year or more of service to be eligible for non-matching company contributions.

• A large percentage of plans have no minimum age requirement for participant deferrals (43.9%) or for non-matching company contributions (44 %). Yet, 21 years old is the most prevalent minimum age requirement for participant deferrals (30.8% of plans), though 24.3% require a person to be 18 years old before they can contribute to the plan.