These were just some of the findings in Mesirow Financial’s Retirement Plan Advisory practice’s inaugural 2011 Retirement Plan Survey. Utilization of materials and tools currently offered to participants may be low, but the survey also found that nearly 41% of plan sponsors have seen an increase in participants asking for assistance with their 401(k) accounts given recent market volatility.

Forty-seven percent of survey respondents reported that participants would take advantage of additional investment education, 20.9% said they would pass on additional education, and a third said participants would prefer a “do it for me” solution, such as target-date funds or managed accounts.  

As for the forum for education, 57% of sponsors said participants would prefer a combination of group meetings, one-on-one meetings and Webcasts, while 22% said they would prefer one-on-one meetings.  

Fifty-six percent of plan sponsors will consider implementation of social media tools and outlets for their 401(k) plan at some point in the future once proven marketplace results come out, while 41% indicated they will evaluate options carefully and determine their appropriateness before implementing a strategy.

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Investment Performance Greatest Sponsor Concern  

Mesirow Financial’s inaugural 2011 Retirement Plan Survey Report says 401(k) plan sponsors’ greatest concern related to their plans is investment performance dictated by a volatile market (38.7%). This is followed by effective participation (30.1%) and dependence on the plan as the only retirement savings vehicle a participant may have (18.3%).  

Forty-two percent of sponsors surveyed offer 11 to 15 investment options, 36.4% offer 16 to 20 and 18.2% offer more than 20. Eighty percent offer target-date funds, and only 12% offer ETFs.  

The vast majority (94%) said they do not offer an in-plan income solution. Reasons cited were “not enough history to prove its value” (42.5%), “too confusing” (38.8%), “lack of interest” (31.3%), “portability issues” (22.5%), and “fiduciary liability” (18.8%). 

Eighty percent of respondents use a plan adviser or consultant, and 85% report satisfaction with adviser or consultant. Forty-eight percent said their adviser acts as investment co-fiduciary, and the same percentage said they would take advantage of the offer for their adviser to act in this capacity. 

The survey found six-in-ten sponsors offer automatic enrollment, but only a third offer an automatic deferral escalation feature. Of those that offer auto features, 26% say participants are disinterested in the concept and some opt outs occur, while 22% say participants understand these concepts and are pleased the plan sponsor is taking action.  

Other survey results included: 

• 85% of respondents have reviewed fees in last six months; 
• 56% do not limit highly-comps contributions to their 401(k); 
• 28% offer non-qualified benefits to key execs, with 64% offering a Voluntary employee deferral plan, 23% offering Employer-provided, defined benefit plan, commonly referred to as a SERP (Supplemental Executive Retirement Plan), and 14% offering Employer matching/profit sharing plan; 
• Half of respondents said under 12 eligible executives are participating in non-qualified plans, while 14% said more than 100 are; 
• 64% said their non-qualified plans have been audited for compliance with 409A.