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Benchmark Your 401k Plan - 2015

    

(Cont...)

Investment Committee

Thirty-three (33) percent of plan sponsors have no investment committee, though it varies heavily by plan size. More than half the plans with less than $5 million in assets did not. Fewer than one in 10 of plans with more than $5 million in assets did not have such a working group.

Investment Options

The number of funds offered to plan participants has leveled off after many years of steady increase. Plans now offer an average of 19 funds for both participant contributions and for company contributions.

Investment Policy Statement

Eighty-nine point one (89.1) percent of all plans have a written investment policy statement, but only about half of those with less than $5 million in assets do.

Loans

Loans are permitted in 87.8% of 401k plans. Fifty point nine (50.9) percent of plans that allow loans permit only one loan at a time. Ninety point one (90.1) percent of plan that allow loans charge some type of loan fee. Twenty-one (21) percent of all 401k participants who were eligible for loans had loans outstanding against their accounts.

Roth 401k Feature

Fifty-one (51) percent offer a Roth feature. The primary reason cited for implementing a Roth was to maintain a competitive plan. When offered the opportunity, 19.5% of participants made Roth contributions.

Roth Conversion Option

Sixteen (16) percent of plan sponsors offer in-plan Roth conversions. When asked why in-plan Roth conversion has not been introduced to date, the leading reason was "not enough interest" at 47%.

Self-directed Brokerage Accounts

Self-directed brokerage accounts are offered in 28% of plans and another 8% are considering offering them.

Safe Harbor Plan Design

Thirty-eight (38) percent of plans have a Safe Harbor plan design in lieu of ADP/ACP testing.

Vesting

Forty point six (40.6) percent of plans provide immediate vesting for matching contributions. Among plans that do not have immediate vesting, graduated vesting is the most common arrangement for all contribution types.


* The most current studies and reports available have been used to compile the information. The following is a list of source material:
1. "56th Annual Survey of Profit Sharing and 401k Plans," published by Plan Sponsor Council of America
2. "Annual Defined Contribution Benchmarking Survey," published in 2014 by Deloitte Consulting
3. "A Report on Vanguard 2013 Defined Contribution Plan Data," published in 2014 by Vanguard
4. "401k Plan Asset Allocation, Account Balances, and Loan Activity in 2013," published in 2014 by Employee Benefit Research Institute and the Investment Company Institute

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This is for educational purposes only. The information provided here is intended to help you understand the general issue and does not constitute any tax, investment or legal advice. Consult your financial, tax or legal advisor regarding your own unique situation and your company's benefits representative for rules specific to your plan.


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