2018
PLANADVISER Micro Plan Survey

Industry Data

Industry Data


Type(s) of DC Plan(s) Offered
All Micro <$1MM $1MM–$5MM
401(k) 92% 89% 93%
403(b) 5% 7% 4%
457 4% 4% 3%
Money purchase 1% 1% 1%
Profit sharing 18% 16% 19%
ESOP1 1% 0% 1%
Nonqualified deferred compensation (NQDC) 1% 1% 2%
SEP2 0% 1% 0%
SIMPLE IRA3 1% 1% 1%
Other 2% 2% 3%
1Employee stock ownership plan; 2Simplified employee pension;
3Savings incentive match plan for employees individual retirement plan.


Use of Advisers

Adviser Use Among Plans

Adviser Use Among Plans
All Micro <$1MM $1MM–$5MM
Yes 69% 62% 72%
No 31% 38% 28%
Common Adviser Services
All Micro <$1MM $1MM–$5MM
Review of fund performance 91% 87% 92%
Plan investment selection guidance 87% 87% 87%
Evaluating/Explaining provider fees 71% 63% 73%
Group participant education 70% 71% 69%
One-on-one participant education 69% 71% 69%
Provider selection/due diligence 61% 60% 61%
Benchmarking plan design 54% 48% 55%
Plan compliance with laws and IPS4 52% 45% 54%
Creation/Monitoring of IPS 52% 44% 53%
4Investment policy statement
Financial Education Offered by Employers
All Micro <$1MM $1MM–$5MM
Saving strategies/prioritization 23% 19% 25%
Financial markets/Investing basics 20% 16% 21%
Rolling over past balances into the plan 19% 13% 22%
Rollover options for separating employees 17% 11% 19%
Budgeting 14% 12% 14%
Retirement health care costs/savings options 11% 11% 11%
Social Security withdrawal options/strategies 10% 9% 10%
Credit/Debt management 9% 9% 8%
College saving 8% 8% 7%

Adviser Fiduciary Status

Financial Education Offered by Employers
All Micro <$1MM $1MM–$5MM
Yes – 3(38) fiduciary 17% 11% 19%
Yes – 3(21) fiduciary 20% 17% 21%
No 15% 13% 16%
Unsure/Don’t know 48% 59% 44%

Does Your Plan Employ a Third Party5 as a 3(16) Fiduciary?

Does Your Plan Employ a Third Party as a 3(16) Fiduciary
All Micro <$1MM $1MM–$5MM
Yes, broad scope 21% 19% 22%
Yes, limited scope 30% 24% 32%
No 34% 37% 33%
Unsure/Don’t know 15% 21% 13%
5Third-party administrator (TPA), recordkeeper, adviser, etc.

Plan Design

Plan Design Elements
All Micro <$1MM $1MM–$5MM
Automatic enrollment 20% 16% 21%
Automatic escalation 13% 12% 14%
Investment policy statement 42% 29% 48%
Loan provision 73% 67% 75%
Safe harbor 66% 75% 63%
Roth feature 62% 58% 63%
Fee equalization policy 15% 17% 14%

Participation Eligibility

Participation Eligibility
All Micro <$1MM $1MM–$5MM
Immediately upon hire 20% 23% 18%
Within 3 months of hire 22% 17% 24%
Within 4 to 11 months of hire 16% 12% 18%
After 1 year from date of hire 40% 44% 38%
After >1 year from date of hire 2% 3% 2%

Automatic Features

Auto-Enrollment Default Deferral Rate

Adviser Use Among Plans
All Micro <$1MM $1MM–$5MM
<3% 16% 17% 16%
3% 45% 45% 45%
>3% – 5% 15% 15% 15%
>5% 12% 4% 14%

Re-Enrollment Actions Taken in Past 12 – 18 Months

Re-Enrollment Actions Taken in Past 12 – 18 Months
All Micro <$1MM $1MM–$5MM
Re-enrolled employees not participating in the plan (requiring them to opt out again or else be enrolled) 14% 13% 14%
Re-enrolled participants saving below the default deferral rate (thus boosting their deferral rate) 5% 6% 5%
Re-enrolled participants not invested in the default investment (meaning current/ future contributions are invested in the plan default) 4% 4% 4%
We have not re-enrolled any employees/ participants 83% 83% 83%


Investments

Investment Committee for the DC Plan
All Micro <$1MM $1MM–$5MM
Internal employees only 22% 19% 23%
External non-employees only 3% 1% 3%
Employees and non-employees 18% 8% 22%
Unsure of composition 1% 1% 1%
No investment committee 49% 59% 46%
Unsure/Don’t know 7% 12% 5%
Income-Oriented Products/Services Offered
All Micro <$1MM $1MM–$5MM
Systematic withdrawal option at retirement 19% 15% 20%
In-plan – guaranteed monthly income 5% 6% 5%
In-plan – professional managed account service 10% 10% 10%
In-plan – no guarantees 4% 4% 4%
Out-of-plan – annuity purchase 2% 3% 2%
Unsure of income product type 30% 28% 30%
No income-oriented products 45% 49% 44%

Frequency of Formal Review of Investment Options

Frequency of Formal Review of Investment Options
All Micro <$1MM $1MM–$5MM
Quarterly 15% 12% 16%
Twice a year 11% 7% 12%
Annually 51% 49% 52%
Every 1 to 2 years 6% 5% 6%
Every 2 to 3 years 3% 4% 3%
Every >3 years 3% 4% 3%
Never 10% 19% 7%
Types of Investment Options Offered
All Micro <$1MM $1MM–$5MM
Balanced fund(s) 70% 61% 73%
Target-date funds 70% 58% 73%
Money market fund 61% 55% 63%
Target-risk funds6 52% 53% 52%
Stable value fund 35% 24% 39%
Professionally managed account service 32% 29% 32%
Real estate/REITs7 23% 18% 25%
Socially responsible fund(s) 10% 10% 10%
Alternative investments8 6% 6% 6%
Employer stock 1% 2% 1%
6E.g., growth, conservative. 7Real estate investment trusts.
8E.g., hedge funds, private equity.
Investment Vehicles Used in DC Plan
All Micro <$1MM $1MM–$5MM
Mutual funds 89% 86% 90%
Separate accounts 20% 17% 21%
Collective investment trusts 7% 6% 8%
ETFs9 (outside of brokerage windows) 16% 12% 17%
Self-directed brokerage window 10% 10% 10%
Mutual fund window 5% 5% 5%
Other 6% 6% 6%
9Exchange-traded funds

Number of Investment Options Offered

All Micro
24.5
Average

<$1mm
21.8
Average

$1mm – $5mm
25.3
Average

All Micro
21.0
Median

<$1mm
20.0
Median

$1mm – $5mm
22.0
Median

Number of Investment Options Held by Participants

All Micro
6.5
Average

<$1mm
6.5
Average

$1mm – $5mm
6.4
Average

All Micro
5.0
Median

<$1mm
4.0
Median

$1mm – $5mm
5.0
Median


Company Match

Matching Contribution Offered

Matching Contribution Offered
All Micro <$1MM $1MM–$5MM
Yes 68% 63% 70%
No 30% 34% 29%
Unsure/Don’t know 2% 3% 1%

‘True-Up’10 Provision for Matching Contributions

‘True-Up’ Provision for Matching Contributions
All Micro <$1MM $1MM–$5MM
Yes 21% 20% 21%
No 46% 30% 51%
Unsure/Don’t know 33% 47% 28%
10A true-up match may be used to restore matching contributions “lost” when an employee
reaches the annual contribution limit prior to year-end.
Participants Maximizing Match
All Micro <$1MM $1MM–$5MM
All or nearly all participants (>90%) 32% 37% 31%
Vast majority (>75% – 90%) 22% 20% 23%
More than average (>50% – 75%) 16% 15% 17%
Less than average (>25% – 50%) 14% 11% 15%
A minority (10% – 25%) 6% 6% 6%
Very few (<10%) 8% 10% 7%

Frequency of Matching Contributions

Frequency of Matching Contributions
All Micro <$1MM $1MM–$5MM
Annually 16% 17% 16%
Quarterly 2% 3% 2%
Monthly (non-pay-period) 4% 5% 3%
Twice monthly (non-pay-period) 4% 3% 4%
Biweekly (non-pay-period) 5% 4% 5%
Per pay period 68% 66% 68%
Other 2% 3% 2%

When Participants Are 100% Vested

When Participants Are 100% Vested
All Micro <$1MM $1MM–$5MM
Immediately on enrollment 38% 49% 35%
After ≤1 year 4% 5% 3%
After 2 years 2% 2% 2%
After 3 years 8% 6% 8%
After 4 years 3% 3% 3%
After 5 years 22% 16% 24%
After >5 years 23% 20% 24%

Approximate Maximum Match

Approximate Maximum Match
All Micro <$1MM $1MM–$5MM
>100% of first 6% of salary 7% 9% 8%
100% of first 6% of salary 13% 11% 11%
51% – 99% of first 6% of salary 34% 38% 33%
50% of first 6% of salary 21% 17% 22%
>50% of first 6% of salary 19% 18% 19%
Other 7% 7% 7%

DC Providers

Length of Relationship With Provider

Length of Relationship With Provider
All Micro <$1MM $1MM–$5MM
>1 year 3% 5% 2%
1 year to 3 years 17% 20% 16%
>3 years to 5 years 18% 16% 19%
>5 years to 7 years 14% 16% 13%
>7 years 44% 37% 46%
Unsure/Don’t know 4% 7% 3%
Frequency of Formal Review of Providers
All Micro <$1MM $1MM–$5MM
Annually 66% 60% 68%
Every 1 to 2 years 10% 10% 10%
Every >2 to 3 years 6% 5% 6%
Every >3 to 5 years 2% 1% 3%
Every >5 years 2% 3% 2%
Unsure/Don’t know 14% 21% 11%

Costs/Fees

Who Pays for Plan’s Administrative/Recordkeeping Costs

Who Pays for Plan’s Administrative/Recordkeeping Costs
All Micro <$1MM $1MM–$5MM
Plan (via participants) 27% 20% 30%
Employer 48% 55% 46%
Both 12% 9% 14%
Unsure/Don’t know 12% 17% 10%
Approximate Average Expense Ratio of Plan Investments
All Micro <$1MM $1MM–$5MM
>0.25% (>25 bps) 10% 15% 8%
0.25% – 0.50% (25 – 50 bps) 16% 15% 16%
>0.50% – 0.75% (51– 75 bps) 9% 9% 9%
>0.75% –1.0% (76 –100 bps) 10% 4% 13%
>1.0% – 2.0% (101– 200 bps) 9% 6% 11%
>2.0% – 2.5% (20 – 250 bps) 0% 1% 0%
>2.5% (>250 bps) 1% 0% 1%
Unsure/Don’t know 44% 51% 42%

Frequency of Formal Review of Administrative Costs/Fees

Frequency of Formal Review of Administrative Costs/Fees
All Micro <$1MM $1MM–$5MM
Annually 76% 72% 77%
Every 1 to 2 years 10% 8% 10%
Every 2 to 3 years 4% 3% 4%
Every 4 to 5 years 1% 1% 1%
Every >5 years 1% 1% 0%
Unsure/Don’t know 9% 15% 7%

Were Total Plan Fees Calculated for the Prior Plan Year?

Were Total Plan Fees Calculated for the Prior Plan Year
All Micro <$1MM $1MM–$5MM
Yes, and we externally benchmarked our
plan’s cost/fees as part of the process
32% 23% 35%
Yes, and we plan to externally benchmark
our plan’s cost/fees in the near future
5% 5% 5%
Yes, but we did not externally benchmark
our plan’s cost/fees
16% 12% 18%
No, but we intend to calculate total fees
in the next 6 months
5% 6% 4%
No, but we may do it at some point
in the future
22% 28% 20%
Unsure/Don’t know 20% 26% 18%


Results

Participation Rate (Average)

Participation Rate Average

Participation Rate (Median)

Participation Rate Median

Account Balance (Average)

Account Balance Average

Account Balance (Median)

Account Balance Median)
Participants Making Hardship Withdrawals
All Micro <$1MM $1MM–$5MM
Average 1% 1% 1%
Median 0% 0% 0%
Participants With Loans Outstanding
All Micro <$1MM $1MM–$5MM
Average 10% 8% 10%
Median 6% 1% 8%
Success Measures Used
All Micro <$1MM $1MM–$5MM
Participation rates 47% 33% 51%
Deferral rates 30% 24% 32%
Employee satisfaction with plan (survey) 13% 10% 15%
External benchmarking of plan design 12% 7% 14%
Participants saving to match 9% 4% 10%
Participants increasing deferral rates in past year 4% 2% 4%
Participants using advice tools/seminars offered 3% 2% 4%
Participants meeting projected monthly goals 3% 4% 3%
We have no formal plan success measures 43% 57% 38%