Research

2013 PLANSPONSOR DC Survey: Plan Benchmarking

Published in PLANSPONSOR January 2014
For more than a decade, PLANSPONSOR's annual Defined Contribution Survey has been the most important industry benchmark, measuring and evaluating 401(k) and other DC providers according to feedback from their own clients. Dozens of categories are rated in service to the employer as well as participant service.

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Micro=<$5MM; Small=$5MM –$50MM; Mid=>$50MM –$200MM; Large=>$200MM –$1B; Mega=>$1B

DC Plan Features
OverallMicroSmallMidLargeMega
Roth feature52.4%50.9%52.9%51.0%51.6%60.7%
Auto-enrollment40.8%23.4%43.1%55.5%57.3%61.4%
Auto-escalation26.9%12.1%26.2%38.3%46.6%54.2%
Systematic retirement withdrawals62.3%54.0%63.3%65.9%71.4%70.0%
Use plan adviser60.3%61.1%61.9%60.8%59.5%46.2%
Employer Contribution Types Offered
OverallMicroSmallMidLargeMega
None9.9%14.3%8.1%8.2%5.9%7.4%
Based on participant deferral68.3%58.4%70.4%73.5%78.1%80.0%
Profit-sharing contribution27.5%26.9%30.8%26.8%22.9%18.7%
Nonelective contribution10.8%8.6%8.5%13.6%18.4%17.7%
Other employer contribution(s)9.9%14.3%8.1%8.2%5.9%7.4%
Employer Match Level
OverallMicroSmallMidLargeMega
>100% of first 6% of salary7.6%7.1%7.1%9.3%6.2%10.6%
100% of first 6% of salary12.2%10.3%11.7%10.7%16.4%19.1%
51%–99% of first 6% of salary30.6%31.4%26.5%30.0%35.8%43.2%
50% of first 6% of salary27.2%26.3%28.9%30.8%23.7%18.6%
<50% of first 6% of salary22.4%24.7%25.8%19.0%17.5%8.5%
Other0.1%0.0%0.0%0.2%0.3%0.0%
Employer Match/Contribution Frequency
OverallMicroSmallMidLargeMega
Each pay period76.7%74.5%74.3%79.2%81.9%85.3%
Monthly5.1%5.8%5.4%4.9%3.1%4.1%
Quarterly2.9%1.9%2.6%4.7%3.6%3.7%
Annually14.3%16.8%16.6%10.0%10.9%6.5%
Other1.0%1.1%1.2%1.2%0.5%0.4%
Investment Vehicles Used
OverallMicroSmallMidLargeMega
Mutual funds94.2%91.9%94.3%97.8%96.8%90.3%
Separate accounts24.4%23.5%22.3%20.4%22.8%50.7%
Collective investment trusts (CITs)14.4%7.3%8.8%14.4%27.8%50.7%
ETFs* (outside of brokerage windows)3.7%3.4%3.2%3.7%5.3%4.8%
Other6.0%4.4%4.5%7.2%10.5%11.1%
Note: * Exchange-traded funds
Investment Classes/Options Available
OverallMicroSmallMidLargeMega
Target-date funds (TDFs)71.9%58.9%74.0%78.1%81.8%84.8%
Target-risk funds36.8%48.2%38.7%28.6%24.0%22.8%
Balanced funds73.8%75.7%74.3%76.2%71.3%64.5%
Money market funds67.1%73.8%68.5%64.7%57.5%55.8%
Employer stock7.9%0.7%2.3%10.2%22.0%41.6%
Stable value funds63.3%46.2%65.6%74.5%75.1%77.2%
Real estate/REITS**28.2%21.8%31.6%30.7%32.0%25.9%
Alternative investments5.6%5.7%5.3%6.1%4.4%9.1%
Socially responsible funds10.6%9.1%10.0%12.1%13.2%14.2%
Self-directed brokerage window19.5%7.3%14.1%29.7%40.5%43.1%
Mutual fund window14.9%16.3%13.6%13.9%13.8%22.8%
Note: ** Real estate investment trusts
Retirement Income Options Offered
OverallMicroSmallMidLargeMega
In-plan annuities (guaranteed)8.6%6.6%7.7%11.6%11.3%10.7%
In-plan annuities (not guaranteed)5.3%2.9%5.7%6.8%7.1%7.6%
Other in-plan (not guaranteed)5.9%3.8%4.9%6.8%10.4%10.7%
Unsure of product types24.0%34.7%26.8%14.2%9.8%8.6%
No income-oriented products60.2%54.1%58.5%66.1%68.0%70.1%
Average Expense Ratio of All the Investment Options
OverallMicroSmallMidLargeMega
<0.25% (less than 25 bpsˆ)7.8%6.3%6.2%7.6%8.8%22.9%
>0.25–0.50% (25–50 bps)18.3%10.6%14.9%19.6%32.1%45.3%
>0.50–0.75% (51–75 bps)18.6%7.9%18.7%32.2%29.4%15.4%
>0.75%–1.0% (76–100 bps)18.3%14.9%24.2%21.5%12.1%3.0%
>1.0% (more than 100 bps)10.4%16.7%11.0%4.8%3.8%3.0%
Don’t know26.6%43.6%25.0%14.3%13.8%10.4%
Note: ˆ Basis points
Investment Advice Offered to Defined Contribution (DC) Plan Participants
OverallMicroSmallMidLargeMega
Financial adviser outside plan37.5%47.2%42.7%23.8%17.1%16.8%
Third party18.4%14.6%16.6%18.5%24.2%40.8%
Proprietary from DC provider32.9%23.8%36.1%40.2%41.3%32.4%
Through another source5.7%5.5%5.8%6.7%5.3%5.2%
Total offering investment advice75.3%76.5%77.4%70.6%70.5%73.1%
No investment advice offered24.7%23.5%~22.6%29.4%29.5%26.9%
Note: ~ Independent of recordkeeper (e.g., Financial Engines, Morningstar, etc.)
Retirement Plan Averages/Feature Adoption
OverallMicroSmallMidLargeMega
Participation rate76.9%74.2%77.7%78.6%77.9%80.1%
Deferral rate6.1%5.6%6.0%6.3%6.7%7.3%
Account balance$76,045 $63,180 $78,250 $77,132 $85,509 $102,071
Participants with loans14.4%11.4%14.2%16.4%16.4%22.0%
Hardship withdrawals+2.1%1.7%1.8%2.5%3.5%3.1%
Investment options held5.76.65.95.14.54.3
Note: +Percentage of participants taking hardship withdrawals in past year
How confident are you that most of your employees will achieve retirement goals by age 65?
OverallMicroSmallMidLargeMega
Very confident3.0%3.5%2.6%2.4%4.4%2.5%
Confident9.0%9.3%8.6%7.6%9.6%11.8%
Somewhat confident32.5%27.3%32.4%37.3%36.3%38.4%
Only a little confident28.6%26.4%30.8%29.5%27.0%27.1%
Not at all confident20.4%23.8%19.8%19.3%20.3%11.8%
Unsure6.4%9.6%5.8%3.9%2.3%8.4%

Methodology

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Methodology

The data that follow represent the analysis of 5,306 responses to the 2013 PLANSPONSOR Defined Contribution (DC) Survey, collected between late June and mid-September 2013. The survey results have been published in two parts: The defined contribution provider ratings were published in the November 2013 issue of PLANSPONSOR, and the plan benchmarking results appear here. For additional information and reports available from the 2013 DC Survey, please contact Brian O’Keefe at bokeefe@assetinternational.com.

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