Defined Contribution in Review

Industry developments over the last 90 days

1Q19

Quarterly Highlights
A summary of plans and sponsors making the news

Quarterly Highlights

A summary of plans and sponsors making the news

Download the full 1Q19 edition of the 

Defined Contribution in Review.

PLANSPONSOR Magazine Releases 2018 DC Plan Benchmarking Survey

From August through October of 2018, PLANSPONSOR gathered roughly 4,000 responses to its annual DC Benchmarking Survey. Of those plan sponsors that responded, about 88% answered that they offered a 401(k), with the second most popular type of retirement plan being a profit sharing plan (20%). More than half (55%) also stated they operate a safe harbor plan, with plans under $5M being the largest adopters (68%). Approximately 70% of plan sponsors that responded had less than $50M in assets and about 16% had greater than $200M. Additional themes from the survey included:

Roth Features

73% have adopted Roth features, and almost all of these match Roth contributions (93%). Approximately 42% of plans allow in-plan Roth transfers and 51% of plans are considering adding this feature.

Loans

Close to 80% offer loans. 57% allow one loan at a time, while 34% allow two loans at a time. Approximately 33% of plans allow participants to pay off their loans after they separate from service.

Automatic Features

47% use auto-enrollment and 38% use auto-escalation. Average plan participation for plans using both auto-escalation and auto-enrollment is 89%, compared with 74% of plans that have neither.

2018 PLANSPONSOR DC Plan Benchmarking Survey: Fees

Also included in the 2018 PLANSPONSOR DC Plan Benchmarking Survey, respondents answered questions
about fee oversight:
53% of plans have calculated their administrative fees, while 28% have calculated and benchmarked their fees
Half of sponsors assess fees against plan assets, while 34% of employers pay fees outside of plan assets; the balance of sponsors split fees between plan assets and the employer
60% of plan sponsors report that their average asset-weighted investment expense ratio is less than 0.50%
Three Other Plan Sponsors Making the News

United Technologies

Added a guaranteed income solution as part of the plan’s QDIA

Michigan Office of Retirement Services

Recently enhanced the state’s 401(k) and 457 plans by introducing auto-escalation in two phases

Baylor Scott & White

Changed loan provisions to allow employees to continue repayment after they separate from service
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