A top goal for 401(k) plan sponsors for the second year in a row is improving employees’ financial planning for retirement, according to the 11th Annual 401(k) Benchmarking Survey conducted by Deloitte, the International Foundation of Employee Benefit Plans (IFEBP) and the International Society of Certified Employee Benefit Specialists (ISCEBS). Nearly two-thirds of respondents (64%) believe their responsibility includes taking an interest in whether employees are tracking towards a comfortable retirement.
To encourage plan participants to make better use of their 401(k), nearly half of plan sponsors (49%) are offering features that automatically increase participants’ contribution levels. However, nearly two-thirds (64%) of plan sponsors report that fewer than 10% of participants take advantage of this opportunity.
Additional survey highlights include:
- Only 15% of respondents surveyed say less than half their employees participate in a 401(k) plan.
- The majority of plan sponsors (70%) reported the average age range of participants is between 41 and 50 years old, representing a slight (4%) increase from the 2010 survey.
- Compared to the 2010 survey, the average participant account balance has been flat or slightly down.
- Auto enrollment continues to grow; 56% of 401(k) plans include an automatic enrollment feature, up 7% from 2010.
According to the survey, the majority (79%) of plan sponsors indicate it is quite important or very important to improve understanding of (and potentially reducing) plan fees. Nearly three-quarters (71%) of plan sponsors rated the new fee disclosure requirements as quite important or very important.
Only 39% of respondents indicate they are very informed and included in the design process when it comes to their ability to deliver the disclosures. More than half (56%) say they are somewhat informed.
Most respondents (75%) agree or strongly agree they have no difficulty in obtaining a clear understanding of plan and participant fees.
As the effective date of fee disclosure regulations approaches, 83% of plan sponsors believe their 401(k) fees are competitive.