Research

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2015 PLANSPONSOR DC Survey: Plan Benchmarking

Published in PLANSPONSOR January 2016

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

DC Plan Features
OverallMicroSmallMidLargeMega
Employer match75.1%66.9%76.5%78.7%82.8%91.5%
Safe harbor49.0%60.7%46.3%42.2%38.6%39.8%
Roth feature62.0%59.0%62.0%65.1%61.6%69.7%
Auto-enrollment41.1%22.0%41.5%59.4%63.7%65.6%
Auto-escalation38.3%26.3%33.3%51.5%61.5%71.8%
Systematic retirement withdrawals50.6%41.4%52.4%57.8%57.8%62.4%
DC Plan Oversight Provisions
OverallMicroSmallMidLargeMega
Plan adviser71.7%65.9%70.6%79.2%81.6%72.3%
Participant managed accounts30.6%28.1%30.8%27.7%31.4%44.6%
Investment policy statement66.9%42.7%67.4%88.9%89.2%85.7%
Loan provision80.7%73.8%80.3%86.3%90.6%91.9%
Hardship withdrawal provision90.5%88.3%90.3%91.9%92.9%95.2%
Fee equalization policy15.8%11.4%12.7%25.2%23.2%26.9%
When Employees Are Eligible to Participate in the Plan
OverallMicroSmallMidLargeMega
Immediately upon hire34.9%17.5%27.3%53.6%71.9%81.8%
Within 3 months26.2%22.0%33.0%27.3%20.5%14.3%
After 4 to 6 months12.8%16.5%15.1%9.0%2.6%1.6%
After more than 6 months26.1%44.0%24.6%10.1%5.0%2.3%
Employer Match Level
OverallMicroSmallMidLargeMega
>100% of first 6% of salary7.8%8.6%7.3%7.5%5.4%10.0%
100% of first 6% of salary11.8%11.7%10.0%11.4%14.0%18.7%
51%–99% of first 6% of salary27.7%25.3%25.6%29.4%32.5%37.0%
50% of first 6% of salary21.2%19.5%22.3%25.9%20.7%14.8%
<50% of first 6% of salary23.3%26.6%27.1%18.2%17.5%9.6%
Other8.2%8.4%7.8%7.7%9.9%10.0%
Employer Match/Contribution Frequency
OverallMicroSmallMidLargeMega
Twice monthly/Biweekly60.4%58.6%60.2%63.7%63.9%58.3%
Monthly5.5%7.6%5.1%3.6%3.8%5.1%
Quarterly2.5%1.7%2.6%3.9%1.6%4.7%
Annually14.4%16.6%15.0%13.1%10.3%10.6%
Other17.1%15.4%17.1%15.7%20.4%21.3%
Retirement Income Options Offered
OverallMicroSmallMidLargeMega
In-plan retirement income products that guarantee monthly income (e.g., deferred fixed annuities, GMIBs*)6.9%5.8%7.2%8.1%7.8%6.2%
In-plan products that guarantee a base benefit that can increase (e.g., deferred variable annuities, GMWBs~)3.0%2.2%3.1%3.9%4.3%1.2%
In-plan products not offering guarantees (e.g., managed payout funds, managed account distributions)7.9%6.9%7.3%6.6%11.0%13.0%
Out-of-plan annuity purchase/bidding service (e.g., Hueler Income Solutions)3.5%0.9%2.8%3.9%5.1%15.5%
Unsure what type of income products are offered24.0%37.1%24.7%14.8%9.4%6.8%
No income-oriented products/services offered58.6%50.1%58.2%67.8%69.4%61.5%
Note: *Guaranteed minimum income benefits. ~Guaranteed minimum withdrawal benefits
Investment Vehicles Used
OverallMicroSmallMidLargeMega
Mutual funds91.7%89.8%93.2%95.3%94.4%80.6%
Separate accounts20.5%22.2%19.5%13.6%15.0%39.9%
Collective investment trusts14.2%7.2%8.3%14.5%30.0%56.5%
ETFs* (outside of brokerage windows)9.2%12.0%9.6%6.3%4.6%6.0%
Self-directed brokerage windows18.1%7.5%13.4%28.9%36.2%46.0%
Mutual fund windows4.6%5.5%3.8%3.5%2.9%9.7%
Other4.8%5.7%3.9%2.9%6.7%6.5%
Note: *Exchange-traded funds
Investment Classes/Options Available
OverallMicroSmallMidLargeMega
Target-date funds75.4%66.9%76.0%81.5%83.0%87.6%
Target-risk funds41.7%54.8%44.0%34.1%21.4%13.1%
Balanced funds71.5%73.0%74.3%69.7%69.2%55.0%
Money-market funds62.0%63.9%64.0%60.4%56.8%52.2%
Employer stock7.7%1.8%3.4%7.4%21.1%41.0%
Stable value funds59.3%41.3%63.4%70.1%76.2%70.5%
Real estate/REITs*26.0%22.3%28.6%29.1%26.5%21.1%
Alternative investments4.6%5.1%4.5%4.6%3.0%6.0%
Socially responsible funds10.3%10.5%9.2%10.4%12.7%12.4%
Note: *Real estate investment trusts
Expense Ratio to All the Investment Options
OverallMicroSmallMidLargeMega
<0.25% (<25 bps*)9.8%7.0%6.5%10.3%16.4%32.4%
0.25%–0.50% (25–50 bps)19.4%13.4%16.0%24.4%34.4%37.3%
>0.50–0.75% (51–75 bps)16.5%8.4%17.7%28.1%25.3%12.4%
>0.75%–1.0% (76–100bps)13.7%11.0%19.8%13.3%7.2%0.8%
>1.0%–1.5% (101–150 bps)7.2%9.4%9.6%2.4%0.8%1.2%
>1.5%–2.0% (151–200 bps)1.1%1.7%1.3%0.6%0.0%0.4%
>2.0%–2.5% (201–250 bps)0.4%0.7%0.1%0.4%0.6%0.0%
>2.5% (>250 bps)0.2%0.3%0.1%0.2%0.6%0.0%
Do not know31.6%48.0%28.8%20.2%14.7%15.4%
Note: *Basis points
Investment Advice Offered to Defined Contribution Plan Participants
OverallMicroSmallMidLargeMega
Financial adviser outside plan40.8%45.1%48.6%32.0%24.9%12.2%
Third party*16.1%11.0%14.8%19.0%21.5%38.4%
Proprietary from DC provider32.4%20.7%34.2%44.4%49.5%33.7%
Through another source30.0%28.1%35.0%30.5%23.6%17.3%
Total offering advice74.0%70.4%78.6%73.4%72.5%68.2%
No investment advice offered26.0%29.6%21.4%26.6%27.5%31.8%
Note: *Independent of recordkeeper (e.g., Financial Engines, Morningstar)
Results Averages
OverallMicroSmallMidLargeMega
Participation rate77.1%73.1%78.5%79.2%80.3%80.5%
Deferral rate6.4%6.1%6.1%6.8%7.3%7.6%
Account balance$86,326 $69,868 $87,820 $95,709 $95,224 $119,055
Participants with loans14.3%10.3%14.3%17.2%18.4%19.7%
Hardship withdrawals*1.6%1.1%1.4%2.1%2.5%2.6%
Investment options held5.25.75.35.14.54.2
Note: *Percentage of participants taking hardship withdrawals in past year
Agree or Disagree: "Most of our employees will achieve their retirement goals by age 65."
OverallMicroSmallMidLargeMega
Agree9.9%9.2%8.1%11.1%13.1%15.5%
Slightly agree20.3%16.2%21.8%21.4%22.8%22.6%
Undecided32.4%34.4%32.0%30.5%29.3%35.7%
Slightly disagree22.5%22.8%22.5%24.3%23.2%16.7%
Disagree14.8%17.3%15.6%12.6%11.6%9.5%

Methodology

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The data represents the analysis of 5,109 responses to the 2015 PLANSPONSOR Defined Contribution (DC) Survey, collected between late June and mid-September 2015. The survey results have been published in two parts: The defined contribution provider ratings were published in PLANSPONSOR, November 2015, and the plan benchmarking results appear here in PLANSPONSOR, January 2016.

Archive

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