Schwab Survey Says Automatic Features, Advice Continue to Gain Ground

A new survey finds continued expansion of participant-friendly plan features.

 

According to data collected from 401(k) plans serviced by Schwab Retirement Plan Services, Inc. through the first half of 2010, nearly three-quarters (74%) of employers make 401(k) advice available to plan participants, as compared to 42% in 2005. 

Additionally, 28% of employers now automatically enroll workers in these programs, compared with just 5% in 2005 (before the passage of the Pension Protection Act of 2006).  Schwab notes that among companies with more than 2,500 participants, more than half (53%) use automatic enrollment.

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More than a third (37%) of employers using automatic enrollment are also using automatic savings increases, more than twice as many as did in 2006 (14%), when Schwab’s plan clients first began implementing automatic savings increases.

More than three-quarters (76%) of employers currently include target date funds in their fund line-ups, compared to 57% in 2005. 

One area where things haven’t made such healthy strides; Schwab notes that 69% of employers provide a 401(k) matching contribution, down from a peak of 76% in 2006 – but up from 67% at the end of 2009.

 

 

Feature Adoption Rates (2005 through June 30, 2010)

Feature

2005

2006

2007

2008

2009

06/30/2010

Participant Advice

42%

56%

62%

66%

74%

74%

Target Date Funds

57%

62%

70%

73%

75%

76%

Automatic Enrollment

5%

14%

25%

34%

37%

38%

Automatic Enrollment and Automatic Savings Increase

N/A

14%

24%

30%

35%

37%

Employer Match

73%

76%

75%

72%

67%

69

 

SPARK Issues Draft Best Practices for 403(b)s Filing Form 5500

The SPARK Institute has released for public comment draft Best Practices for ERISA-covered 403(b) plans that must file a full Form 5500.

The “Best Practices for Multiple Vendor 403(b) Plans Form 5500 Data Aggregation – Version: F5500-2.0” are designed to assist plans that use multiple vendors and must gather and aggregate data from their vendors in order to complete the Form. These Best Practices replace “guidelines” for completion of 5500 Forms for the 2009 plan year that were issued by The SPARK Institute in January.  

The Best Practices document is available at http://www.sparkinstitute.org/comments-and-materials.php.  

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Comments are due by September 7th and should be sent to 403b5500@sparkinsititute.org. 

 

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