Plan Sponsors Expand Options, Tighten Focus To Stay Competitive

The 2000 401(k) Plan Benchmarking Survey by Deloitte & Touche also found that the average number of investment options among responding plans was 10, and that plan sponsors continue to pay the majority of 401(k) plan related fees.  Of survey respondents:

• 69% allow employees to participate within 6 months of employment and 34% provide for immediate eligibility
• Over three-fourths (78%) provide some form of employer match

“The results of this year’s survey clearly indicate that companies are responding to the tight labor market and offering enhanced benefits such as accelerated eligibility and greater choice in investment options,” said Patricia Jackson, Deloitte & Touche principal and survey director.

Tighter Focus

Over half (60%) of employers now have written investment policies, up 10% from a year ago.  A vast majority (86%) conduct plan reviews at least once a year.  The survey also found that an increasing number of sponsors are requiring some form of fee guarantees based on:

• reporting
• overall quality of service
• plan participation.

A substantial number (84%) have Internet access for participants, and 88% of those allow transactional activity via the Internet.  More than two-thirds (68%) are using the Internet to communicate general plan information, but less than half (44%) use the Web for employee education – and just 18% are currently offering investment advice via that medium.

Forty-one percent provide paperless loans, which provide participants with a loan check without the usual plethora of paperwork.

The survey was based on data collected from 452 human resource and employee benefits executives nationwide, with an average of 2,000 employees.