Data & Research October 11, 2012

Sponsors, Participants Put More into Plans

More companies and participants are putting money into their plans, and at higher rates than in previous years, Plan Sponsor Council of America(PSCA) found.
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The PSCA’s 55th Annual Survey of Profit Sharing and 401(k) Plans finds the percentage of companies that made the matching contribution, when provided for in the plan, increased to 96% (up from 91% in 2010). The survey’s results are based on the 2011 plan-year experience of 840 plans representing 10.3 million participants and $753 billion in assets. Small companies in particular are bringing back the match, with 93% of companies with fewer than 200 participants making the match in 2011, versus only 83% in 2010. The percentage of eligible employees making contributions to the plan increased from 77% in 2010 to 80%.

In addition, the average amount of the contributions showed improvement. The average company contribution increased to 4.1% of pay (up from 3.7% in 2010), and the average participant deferral rate ticked up, from 6.2% to 6.4% of pay.

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Eighty-eight percent of U.S. employees at respondent companies are eligible to participate in their employer’s defined contribution plan. Most companies allow employees to begin contributing to the plan immediately upon hire (60%). The average percentage of eligible employees who have a balance in the plan is 86%. An average of 80% of eligible employees made contributions to the plan in 2011, when permitted.

Plan design features focused on increasing overall participant outcomes continued to grow in popularity:

Target-Date Funds: Availability increased from, 61.5% to 68.6% of plans. The average allocation of plan assets is 12%.

Roth 401(k):  Roth after-tax contributions are now permitted in nearly half of plans (49%), up from 46% in 2010. Seventeen percent of participants made Roth contributions when offered the opportunity. The average Roth deferral (from ADP test results) was 4% by lower-paid participants and 5% by higher-paid participants.

Automatic Enrollment: Automatic enrollment (AE) is used by 46% of plans (up from 42% in 2010). The percentage of AE plans with a default deferral rate greater than 3% increased from 26% of plans in 2010 to 32%. The most common default investment option is a target-date fund, present in 70% of plans.

 

 

(Cont’d…)

The PSCA survey also found investment advice is offered by 58% of respondent companies. Nineteen percent of participants used advice when it was offered. Participant usage tends to be greatest in small plans.

Plans offer an average of 19 funds for both participant contributions and for company contributions. The funds most commonly offered to participants are actively managed domestic equity funds (90% of plans), actively managed international equity funds (87%), indexed domestic equity funds (83%), and actively managed domestic bond funds (80%).

The average plan has approximately 61% of assets invested in equities. Assets are most frequently invested in actively managed domestic equity funds (24.8% of assets), target-date funds (12%), stable value funds (11%), indexed domestic equity funds (9%), and actively managed bond funds (8%).

More than 15% of plans allow company stock as an investment option for both participant and company contributions.

Other survey findings include:

Hardship withdrawals are permitted in 91% of 401(k), 87% of combination, and 6% of profit sharing plans; 2% of participants took a hardship withdrawal in 2010, when permitted.

Loans are permitted in 89% of 401(k), 88.4% of combination, and 18% of profit sharing plans; 54% of plans with loans permit only one loan at a time.

39% of plans provide immediate vesting for matching contributions, while 24% provide immediate vesting for profit sharing contributions.

68% of companies retain an independent investment adviser to assist with fiduciary responsibility.

The full report is available for purchase at www.psca.org.

 

Diversions October 11, 2012

Curing Myths of the Flu Vaccine

 

Manufacturers estimate that 135 million doses of flu vaccine will be produced this season, according to the Centers for Disease Control and Prevention.

 

 

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According to Dennis Cunningham, a physician specializing in infectious diseases at Nationwide Children’s Hospital in Columbus, Ohio, October starts getting very busy. Emergency department, urgent care centers and inpatient numbers always go up because of the flu, he said, although many patients could avoid getting sick by practicing just a few simple precautions.

First thing to do is get a flu shot. One problem is that a lot of people buy into the long-held myths about the flu vaccine.

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Myth: The flu vaccine can actually give you the flu. 

“This is probably the most common myth out there, but it’s simply not true,” Cunningham said. “The vaccine can give you some mild symptoms. You may feel a bit achy, and your arm may be a little tender where you first get the shot. But that’s actually a good thing and shows that the vaccine is working. It tells us your body is responding appropriately to the vaccine.”

A few slight symptoms shouldn’t be confused with the actual flu. The vaccine may leave you feeling a bit warm or achy for a day or two, but true influenza keeps a person unmistakably ill and in bed for a week with high fever.

Myth: You should wait until it is cold outside to get your flu vaccine. 

Cunningham said that some people worry that getting the vaccine too soon means it may wear off by the time winter arrives. Vaccinating people even in August will protect them throughout the entire flu season.

Myth: The flu is only spread by sneezing. 

“Germs are pretty easy to pass around, and flu is really contagious,” Cunningham said.

A good first line of defense? Wash and sanitize your hands often during flu season. The easiest way is to use hand gels, but make sure they contain at least 65% to 95% alcohol. If soap and water are handy, that is even better for protecting against germs. Wash often and lather up. Make sure to rinse your hands completely to get the soap and germs off.

Myth: Flu vaccines do not protect you from current strains. 

From the H1N1 scare in 2009 to swine flu and the bird flu, it seems there is a new strain making headlines each year. But researchers track the most recent, most dangerous strains, and work to stay one step ahead.

“The World Health Organization and Centers for Disease Control and Prevention pick the strains they think are most likely to circulate in the coming months so that people are protected against everything that may go around,” Cunningham said. Every year’s vaccine includes two A strains and one B strain of influenza.

 

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