PSCA Releases Results of Annual Survey of 401(k) Plans

The Profit Sharing/401k Council of America (soon to be known as the Plan Sponsor Council of America; see “PSCA Changes Name to Expand Organization’s Scope”) has released its 54th Annual Survey of Profit Sharing and 401k Plans. The survey provides up-to-date information on current practices and trends in profit sharing and 401(k) plans. It includes data on the 2010 plan-year experience of 820 companies with 10.5 million participants and $691 billion in plan assets. The survey contains 149 tables of data.

Highlights of survey results include:   

Asset Allocation: The average plan has approximately 63% of assets invested in equities. Assets are most frequently invested in actively managed domestic equity funds (25.1% of assets), target-date funds (13.0%), stable value funds (9.9%), indexed domestic equity funds (8.8%) and actively managed international equity funds (8.4%)

Automatic Enrollment: 41.8 % of plans have an automatic enrollment feature. Of those plans that have an automatic enrollment feature, 82.3% use this feature with new hires only and 17.7% use it for all non-participants. The most common default deferral is 3% of pay, and the most common default investment option is a target-date fund.

Company Contributions: Profit sharing plans tend to offer the most generous contributions, averaging 6.8% of pay. The average company contribution in 401(k) plans is 2.3% of pay and in combination plans it is 4.6% of pay.

Company Stock: 14.7% of plans allow company stock as an investment option for both participant and company contributions and 3.2% of plans allow company stock as an investment option for company contributions only.

Employee Eligibility: 89.0% of U.S. employees at respondent companies are eligible to participate in their employer's DC plan. Most companies allow employees to begin contributing to the plan immediately upon hire (59.2% of companies). Companies are more likely to have a one-year service requirement for non-matching contributions than for matching company contributions.

Hardship Distributions: Hardship withdrawals are permitted in 89.0% of 401(k), 85.8% of combination, and 4.5% of profit sharing plans. 1.9% of participants took a hardship withdrawal in 2010, when permitted.

Investment Options: Plans offer an average of 18 funds for both participant and company contributions. The funds most commonly offered to participants are actively managed domestic equity funds, actively managed international equity funds.

PSCA's Annual Survey of Profit Sharing and 401k Plans is available for purchase at www.psca.org.