Retirement savings took a beating in the downturn, leaving manyin what is understandably a state of high anxiety about the bestways to ensure everyone gets the most they can out of their 401(k)plan.

Over the last several years, measures such as auto-enrollmentand auto-escalation of employee contributions have helped. Yetwhile they’ve proven effective, industry experts say more must bedone and, specifically, that adoption of many of these features byplan sponsors remains too low. >>

It doesn't help when attention-grabbing authors such as HelaineOlen, in her book “Pound Foolish: Exposing the Dark Side of thePersonal Finance Industry,” pronounce the shift from definedbenefit to defined contribution programs a disaster for theAmerican saver.

“Plan design and how (people) approach their 401(k),” is key,says Rick Meigs, president of 401khelpcenter.com. “Secondly, andmore to the point, I don't see a holistic movement to change the401(k).”

Not yet, anyway. But if big reforms—including the notion ofmandatory savings—aren't in the cards any time soon, giants in theindustry such as Fidelity and Vanguard are nonetheless doing whatthey can to strengthen 401(k) plans.

Help is undeniably needed.

A nationwide poll of more than 1,000 American workers whoparticipate in a 401(k) plan by J.P. Morgan Asset Management foundthat the vast majority of savers don't have a clue how to managetheir retirement planning and admit they need professionalhelp.

Seventy-six percent of participants said they need professionalassistance with key elements of retirement planning, including howmuch to save and how to allocate their investments. Despite thisdesire, roughly half (48 percent) don't have access to help throughwork or on their own.

Beth McHugh, Fidelity's vice president of market insights, saysmany changes in plan design in recent years have, in fact, helpedemployees increase their savings rates. Fidelity administers plansfor 20,000 businesses with 12 million workers. In the majority ofthe plans, from small employer to large, new employees areautomatically enrolled in plans.

“That's a great example of how plan design can help millions ofAmericans,” McHugh says. “Auto features get people on the path tosaving earlier and at higher levels.”

That said, there are a number of changes that could make 401(k)smore robust:

• Auto-enrollment: McHugh says this feature can be expandedto include more than just new employees, as most plans currentlydo. Currently, longtime employees are often left to their owndevices.

• Auto-escalation: This feature increases employeecontributions each year, up to a certain threshold. It allows,McHugh says, for annual savings to reach the 10 percent to 15percent figure considered necessary to adequately fund retirement.More employers should consider adopting this approach, shesaid.

• Company match: Many plans call for employee contributionsto be matched up to the first 3 percent. McHugh says if the formulawere tweaked to match at 50 percent up to 6 percent of deferrals,it would encourage more savings without costing employersadditional money.

• Loans: Employers are beginning to look at restrictingborrowing against 401(k)s to money put into them by employees. Thisapproach preserves the employer match in the retirement account.(Although Vanguard's Jean Young sees a positive side to loans:“Loans have been shown to increase both plan participation anddeferral rates. Over 90 percent of loans are repaid. Consider theeligible population who earns less than $30,000 per year; 54percent of this demographic do not participate in their plan, 35percent are participating with no loans outstanding, and 11 percentare participating with an outstanding loan. I would suggest the 11percent of low-wage participants with some retirement savings arebetter off than the 54 percent of eligible low-wage workers with noretirement savings.”

• Education: In addition to the standard problem ofincreasing financial literacy, McHugh sees an opportunity toincrease awareness of employees of how much they need to save andhow well they are doing. Last year, Fidelity introduced the XFactor, a benchmarking tool that supplies such information atvarious points along an employee's career.

All of the steps above have been adopted to varying degrees. Thequestion of how to maximize their benefits is a bit trickier.

“All the pieces to create a ‘supercharged’ 401(k) exist in alegal sense,” Meigs says. “It's up to the vendor, a major player,to emphasize this and then the market will change.”

Of course, all of these changes might not be right for everycompany. For smaller businesses, the costs of auto-enrollment canbe an impediment, according to McHugh, because auto-enrollmentcreates higher costs for recordkeeping and for matchingcontributions.

And Young, a senior analyst with Vanguard's Center forRetirement Research and author of the company's annual report onparticipant trends, “How America Saves,” says that the need forauto-enrollment is more nuanced.

“Companies often offer retirement plans in order to becompetitive with other potential employers. Automatic enrollmenthas grown dramatically over the past five years,” he says.“However, not all plans need AE. Some 401(k) plans are supplementalto a traditional DB plan. Some plans have higher participationrates without AE.”

McHugh sees a growing interest by employers to drill down on theefficiency of their retirement plans they offer.

“We see employers really looking at the plan they offer, asking,‘Is it really helping employees get where they need to be?’” shesays.

Sometimes, though, the simplest solution to solving theretirement “crisis” is overlooked.

“Actually offering a plan—and depending on the stat youchoose—there's still a significant component of the private sectorworkforce that is not offered a plan,” Young says.

Skimpy retirement planning

People know they need to save for retirement, but a survey byCapital One ShareBuilder found that only 72% of Americans areactually doing it.

While 93% think they should contribute some portion of theirincome toward retirement and half believe it should be more than 10percent, only one-fifth are currently saving 10 percent orhigher.

On average, people are saving only 6.4% of their annual incomefor retirement, the survey found.

“Unfortunately, saving for retirement is often put on theback-burner for what seem like more pressing financial priorities,such as paying for college,” said Dan Greenshields, president ofCapital One ShareBuilder, Inc. “Now more than ever, Americans areresponsible for ensuring their own financial security duringretirement, and the earlier you begin to plan and save, thebetter.”

Nearly 60% of Americans say they plan to retire by age 65, butnearly the same percentage fear they’ll never save enough to do it.Forty-one percent of those surveyed believe they are saving lessthan the average person their age.