plan participation and deferral rates both rose again, according to the 2016 PLANSPONSOR Defined Contribution (DC) Survey, as did the percentage of plans
with immediate eligibility and immediate vesting. Some could argue that such
changes are within the survey’s margin of error, but the five-year trend for
these values shows a growth rate that is unquestionably positive
sponsors, benchmarking plans is more relevant than ever, considering avoiding
lawsuits, attaining and retaining employees and contending with budgetary and
plans, or benchmarking, usually falls into one of three categories: 1.) Fee
benchmarking, 2.) Hunting for best practices, and 3.) Competitive/peer
When benchmarking fees, sponsors look to ensure that the fees they are paying
into their plan are reasonable. Best practices typically focus on improving
participation and deferral rates, in order to drive better outcomes. And
looking at what competitors are doing vis-à-vis their plan is typically with an
eye to retaining and attracting key talent.
survey found that plans have a median participation rate of 86%, with
participants saving a median of 6.5%. Seventy-nine percent of plans permit
their participants to take out loans, and 37% allow their participants to begin
participating in their plan immediately upon hire. Forty-two percent of plans
automatically enroll their employees into the plan, and when they do, 66% use atarget-date fund (TDF) as the default investment.
three-quarters, 75%, of plans offer a company match, and slightly more, 76%,
offer some form of investment advice. Fifty-eight percent of sponsors have figured
out what provider fees have been in the past 12 months, and 68% use a financial consultant
or adviser. Only 31% are confident that their employees will reach their
retirement goals by age 65.