A growing priority for many companies: Getting the biggest possible bang for their employees’ retirement bucks.
The data gleaned from the Profit Sharing/401(k) Council of America’s (PSCA) 53rd annual survey of retirement plans shows that plan sponsors are more focused on their investment lineup than ever before.
Some proof:
- Plan investments are being monitored more frequently today, as 64.4% of sponsors review their investments quarterly
- To help participants make smart investment choices, 31.4% of employers now offer a “professionally managed alternative” — up from 26.2% in 2008, and
- 60.1% of plans offer direct investment advice to participants — up from 51.8% in 2008.
PSCA’s survey compiled this data from 931 plans representing 8.6 million participants from companies of all sizes across the U.S.
Benchmarking data
The survey also found some interesting trends among these plans features:
- Automatic enrollment — 38.4% of companies now have automatic enrollment. It’s most popular in large plans, as 53.7% of plans with 5,000 or more participants use automatic enrollment. The most common default contribution is 3% of pay.
- Auto escalation — 53.1% of companies automatically increase employees’ contribution rates over time.
- Company contributions — The average company contribution is 2.1%. Companies with profit-sharing plans contribute at a much higher rate — 8.1%.
- Advisors — 66.7% of companies have an independent investment advisor assist with fiduciary responsibility.
- Loans — Loans are now permitted in 90.2% of 401(k) plans.
- Target-date funds — 62.3% of companies now offer target-date funds.
- Vesting schedules — 39.5% of companies vest employees immediately for matching contributions.
For more in-dept info from this survey, click here.
