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
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
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?
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
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
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
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
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
Number of Investment Options Held by Participants
Company Match
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
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
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
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
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
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
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
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?
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 (Median)
Account Balance (Average)
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% |