COLLECTED WISDOM™ on Studies and Research focused on 401k Plans
America's Commitment to Retirement Security: Investor Attitudes and Actions - Summary: This survey polled respondents about their views on DC retirement plan saving and their confidence in 401k and other DC plan accounts. Survey responses indicated that households value the discipline and investment opportunity that 401k plans represent and that households were largely opposed to changing the tax preferences or investment control in those accounts.
Source: Investment Company Institute
Retirement Account Balances (Updated 1/12) - Summary: The retirement savings of American households took a big hit when the stock market crashed in 2008. Recently, however, a good portion of these losses has been reversed. This fact sheet follows trends in retirement account balances since the beginning of 2005.
Source: Urban Institute
2011 Retirement Plan Governance Survey - Summary: Yet the Towers Watson 2011 survey on qualified retirement plan governance finds that the process of decision making and oversight varies widely. While most employers are concerned with compliance, many are not taking all the steps available to manage the financial, organizational and other risks created by ineffective plan governance. A sizable number of employers, however, are getting the message.
Source: Towers Watson , December 2011.
401k Plan Asset Allocation, Account Balances, and Loan Activity - Summary: This report is an update of EBRI and ICI's ongoing research into 401k plan participants' activity through year-end 2010. The report is divided into four sections: the first describes the EBRI/ICI 401k database; the second presents a snapshot of participant account balances at year-end 2010; the third looks at participants' asset allocations, including analysis of 401k participants' use of target date, or lifecycle, funds; and the fourth focuses on participants' 401k loan activity.
Source: Investment Company Institute , December 2011.
Annual Compensation, Retirement and Benefits Trends Survey - Summary: The annual Compensation, Retirement and Benefits Trends Survey conducted by Verisight and RSM McGladrey is designed to uncover key trends across the broad spectrum of retirement, benefits, and employee reward programs. More than 850 organizations participated in the survey. The majority of participants are mid-sized, private and not-for-profit companies.
Source: Verisight , December 2011.
Inside the Structure of Defined Contribution/401k Plan Fees - Summary: The Investment Company Institute and Deloitte Consulting have prepared the second edition of the Defined Contribution/401k Fee Study that was first conducted and published in the 2009 study. Specifically, this report addresses and updates: The mechanics of defined contribution plan fee structures; Components of plan fees; and, Primary and secondary factors that impact fees ("fee drivers").
Source: Investment Company Institute , November 2011.
Points of Plan Design Differentiation Emerge in PLANSPONSOR's Annual DC Survey - Summary: Whatever your current method(s) of assessment and evaluation, plan sponsors have long appreciated the reality that, while every program may have its own unique set of circumstances and constraints, there is value in being able to compare your retirement plan designs with a valid set of comparables, if only to ensure that your design remains competitive.
Source: Plansponsor.com, November 2011.
The Path Forward: Engaging the Younger Employee in DC Plan Participation - Summary: U.S. companies must act now to engage younger workers in employer-sponsored defined contribution plans if up-and-coming generations are to have a realistic chance of achieving a financially secure retirement, according to this new study from Northern Trust.
Source: Northern Trust , November 2011.
The Impact of Reduced Choice on Participation in 403(b) Plans - Summary: This paper examines the impact of participant choice in 403(b) plans. It looks at the extent to which school district employees want choices in their 403(b) plans and whether providing those choices is beneficial to them.
Source: ASPPA , October 2011.
New Study Provides 403(b) Market Overview - Summary: Sponsors in all segments of the 403(b) market are looking to their providers as 403(b) partners and experts. Providers offering solutions to help ease plan administration and cost will have a competitive edge. Government regulation and more transparent fee reporting are driving both innovation and consolidation.
Source: 401khelpcenter.com, September 2011.
Plug the Drain: 401k Leakage and the Impact on Retirement - Summary: In this white paper, the Defined Contribution Institutional Investment Association examines the impact of leakage factors on workers' retirement income adequacy. They examine how loans, hardship withdrawals, distributions and cash outs impact potential outcomes. Contrary to many assumptions around leakage, the DCIIA research points to trends around cash outs and distributions to be the most harmful of the leakage points. Finally they provide recommendations on steps plan sponsors can take now to prevent retirement savings leakage.
Source: Defined Contribution Institutional Investment Association , August 2011.
12th Annual Transamerica Retirement Survey - Summary: The 12th Annual Transamerica Retirement Survey found that for the first time since the recession began, rising employer confidence is accompanied by an increase in enhancements to retirement benefits as well as reinstatement of benefits that had been suspended.
Source: Transamerica Center for Retirement Studies , July 2011.
SHRM's 2011 Employee Benefits Research Report - Summary: SHRM's 2011 Employee Benefits research report provides comprehensive information about the types of benefits U.S. employers offer to their employees. In 2011, 284 benefits were explored, covering the areas of health care and welfare benefits, preventive health and wellness benefits, retirement savings and planning benefits, financial and compensation benefits, leave benefits, family-friendly benefits, flexible working benefits, employee services benefits, housing and relocation benefits, and business travel benefits. The report also examines trends in employee benefit offerings over the last five years.
Source: Society for Human Resource Management, June 2011.
How America Saves 2011: A Report on Vanguard 2010 Defined Contribution Plan Data - Summary: This 92 page report, now in its 10th edition, is widely used as a barometer of retirement planning trends. Along with a look at the overall patterns of Vanguard's three million-plus participants, How America Saves this year includes supplemental reports with analyses of participant behavior in the defined contribution retirement plans of eight specific industries.
Source: Vanguard , June 2011.
12th Annual Transamerica Retirement Survey - Summary: This survey -- conducted among 4,080 American workers -- found that for many Americans, the foundation of their retirement strategy is simply to not retire or to work considerably longer than the traditional retirement age of 65. Overall, American workers' confidence in their ability to achieve a financially secure retirement is low.
Source: Transamerica Center for Retirement Studies , May 2011.
Leakage of Participants' DC Assets: How Loans, Withdrawals, and Cashouts Are Eroding Retirement Income - Summary: Savings leak out of the retirement system before participants retire further eroding retirement readiness. More than 1.8 million employees were examined across over 110 large defined contribution plans to explores the magnitude of the problem, the impact to participant savings and ideas to curb these behaviors.
Source: Aon Hewitt , May 2011.
401k Participants' Awareness and Understanding of Fees - Summary: Successfully using a 401k plan to prepare for retirement requires knowledge of investment opportunities, types of plans and their mix of investments, knowledge of risk, and awareness of the costs associated with maintaining a plan. Despite the need for knowledge, seven in ten are not aware that they pay fees to their 401k plan provider to maintain their account. When told of these fees, six in ten are not aware of the amount they pay in fees to maintain their account.
Source: AARP , April 2011.
When Smaller Menus are Better: Variability in Menu-Setting Ability and 401k Plans - Summary: Economists love menus, which can be used to help understand people's choices. For example, do we prefer more choices (larger menu) or fewer (shorter menu)? But the menu itself has to be pre-selected. This research by David Goldreich (Rotman School of Management) and Hanna Halaburda (Harvard Business School) focuses on the menu setter's decisions about what to include, and how large a menu to construct in the context of 401k plan choices.
Source: HBS Working Knowledge, April 2011.
Investments in DC Plans: Results and Analysis From the 2010 Survey of DC Plan Sponsors - Summary: To better understand how plan sponsors are helping employees manage today's investment challenges, Towers Watson's 2010 Survey of DC Plan Sponsors asked employers about investment menus, communications regarding investment and other issues. This article reviews the results of the survey.
Source: Towers Watson, March 2011.
A Look at 2010 Defined Contribution Investors - Summary: Study examines retirement investors in private and public sector employer Defined Contribution plans, looking at recent account experience, loan and hardship withdrawal patterns and investor demographics.
Source: ING Institute for Retirement Research , March 2011.
Plan Sponsor Survey: Structuring DC Plan Automatic Features to Pump Up Retirement Savings - Summary: The two facts combine to create a contribution gap that is looming as large today as the participation gap just a few years ago. Plan sponsors need now to devise strategies as effective in raising contribution levels as automatic enrollment has been in raising participation rates.
Source: Defined Contribution Institutional Investment Association , March 2011.
Grant Thornton's 7th Annual Retirement Plan Survey - Summary: This is a 24 page report on the results of Grant Thornton's 7th annual Retirement Plan Survey. Covers investments, employer/employee contributions, enhancing plan participation, maintaining compliance, 403(b) plans, and defined benefit plans.
Source: Grant Thornton LLP , March 2011.
The 2011 Retirement Confidence Survey - Summary: This 40 page report find that instead of making fundamental adjustments to their spending and saving patterns in response to the decline in confidence, workers continue to change their expectations about how they will transition from work to retirement in what has been called an age of "the new normal."
Source: Employee Benefit Research Institute , March 2011.
Perspectives: New Strategies in Defined Contribution Plan Design - Summary: To better understand what employers are doing to improve the success of DC plans during these difficult economic times, Towers Watson conducted its 2010 Survey of DC Plan Sponsors. Some of the key findings are reviewed in this 12 page report.
Source: Towers Watson , February 2011.
401k Plan Asset Allocation, Account Balances, and Loan Activity in 2009 - Summary: The average 401k retirement account balance rose 31.9 percent in 2009, according to a report released by the Employee Benefit Research Institute and the Investment Company Institute analyzing a group of consistent participants. The rise in 2009 was in line with the 2003-2007 pattern of steady increase in account balances and in contrast to the 27.8 percent decline in 2008. The EBRI/ICI report, "401k Plan Asset Allocation, Account Balances, and Loan Activity in 2009," is based on the largest database of its kind.
Source: Investment Company Institute , November 2010.
A Look at Private-Sector Retirement Plan Income After ERISA - Summary: Across all income groups, retirement income from employer-sponsored retirement plans is more prevalent among retirees today than in the mid-1970s, when sweeping new retirement plan regulations were enacted, according to a new study released by the Investment Company Institute.
Source: Investment Company Institute , November 2010.
The Impact of Auto-enrollment and Automatic Contribution Escalation on Retirement Income Adequacy - Summary: This new study finds that auto-enrollment and auto-contribution escalation in 401k plans -- depending on how they're implemented and used -- can result in a big improvement in retirement savings, especially for low-income workers.
Source: Employee Benefit Research Institute , October 2010.
How America Saves 2010: A Report on Vanguard 2009 DC Plan Data - Summary: This report is based on records for more than 3.2 million plan participants. It found that many participants in 2009 experienced higher account balances, traded minimally in response to market volatility, increasingly diversified their assets through automatic investment programs, and protected their retirement nest egg when they left their employer. Only a very small group of participants appeared to be adversely affected by the tough economy, leading to a modest decline in plan participation and savings rates and slight increases in loans and hardship withdrawals.
Source: Vanguard , August 2010.
Retirement Income Guarantee Products Snapshot Survey - Summary: PSCA conducted a snapshot survey of plan sponsors in March, 2010 to determine their views on retirement income products. This is an overview of the survey results.
Source: Profit Sharing/401k Council of America , April 2010.
2010 Investment Company Fact Book - Summary: U.S.-registered investment companies play a significant role in the U.S. economy and world financial markets. These funds managed more than $12 trillion in assets at the end of 2009 for nearly 90 million U.S. investors. This is a review of trends and activity in the investment company industry.
Source: Investment Company Institute , April 2010.
Conservation of Choice: Simplifying Investment Options to Better Serve Participants - Summary: This paper explores why retirement plan participants tend to under save, misunderstand their investment options, and make poor allocation decisions. Based on studies in behavioral finance, it offers some potential solutions for structuring plan options to encourage participants rather than frustrate and confuse them.
Source: Arnerich Massena , April 2010.
11th Annual Transamerica Retirement Survey - Summary: The results of the 11th Annual Transamerica Retirement Survey -- conducted among nearly 3,600 American workers -- found that workers who are offered 401k plans, or similar employee-funded arrangements, exhibit more proactive retirement savings behaviors, demonstrate higher levels of knowledge about retirement investing, and are more confident in their ability to retire comfortably.
Source: Transamerica Center for Retirement Studies , April 2010.
2009 Risks and Process of Retirement Survey - Summary: This report presents the results of a telephone survey among Americans aged 45 to 80 conducted by Mathew Greenwald & Associates, Inc., and the Employee Benefit Research Institute on behalf of the Society of Actuaries. The purpose of the study was to evaluate Americans’ awareness of potential financial risks in retirement, how this awareness impacts the management of their finances with respect to retirement, and how Americans are managing the process of leaving the workforce.
Source: Society of Actuaries , April 2010.
Retirement Plan Survey 2010 - Summary: This study was conducted to gain a general assessment of the level of understanding of investments, fees and administrative practices related to retirement plans. The survey's major findings address: Fiduciary and investment challenges in 2009, Employer and employee economic challenges in 2009, Plan design features, Tax and ERISA compliance issues, and 403(b) plans.
Source: Grant Thornton LLP , April 2010.
2010 Retirement Confidence Survey - Summary: The 44 page 2010 Retirement Confidence Survey finds that Americans' confidence in their ability to afford a comfortable retirement, which had dropped sharply over the past two years, has stabilized now that the economic volatility of the recession has abated. The steep declines in other retirement confidence indicators also appear to be slowing. However, the retirement preparations reported by some workers are eroding, leaving them less prepared for retirement.
Source: Employee Benefit Research Institute , March 2010.
Retirement Plan Participation: Race/Ethnicity Differences - Summary: How do race and ethnicity affect the likelihood of participating in a retirement plan? How do the size of employers and the birthplace of workers affect these levels? Here are some of the key findings concerning race/ethnicity differences in employment-based retirement plan participation.
Source: Employee Benefit Research Institute , December 2009.
Participating in a Retirement Plan: Gender Differences - Summary: How does gender affect the likelihood of participating in a retirement plan? Here are some of the key findings on gender in employment-based retirement plan participation.
Source: Employee Benefit Research Institute , December 2009.
Emerging Retirement Model Study: A Survey of Plan Sponsors - Summary: MetLife conducted this survey of 240 plan sponsors at companies with at least 1,000 employees to examine employer attitudes and behaviors towards the aging workforce in the midst of a deep economic crisis, and recent regulation addressing the retirement security provided by pension and retirement plans.
Source: MetLife , December 2009.
Study of Employee Benefits: 2009 & Beyond - Summary: Given the extraordinary challenges and the potential changes facing plan sponsors, the need for sound benefits strategy and planning has never been greater. Benefits professionals are playing an increasingly important role as plan sponsors seek expert advice and guidance on maintaining the competitiveness of their benefits programs while managing costs effectively. This study looks at these and other trends that will continue to shape the employee benefits landscape over the next five years.
Source: Prudential , November 2009.
Trends and Experience in 401k Plans 2009 - Summary: The 2009 Trends and Experience in 401k Plans survey results reveal emerging trends in 401k plan design and administration. Information on key aspects of 401k design, investments, education, communication, plan expenses, and plan success was collected from a cross-section of plan sponsors.
Source: Hewitt Associates , November 2009.
A Study of 401k Savings Disparities Across Racial and Ethnic Groups - Summary: Significant differences can be found across race and ethnicity in the way U.S. employees save and invest in their 401k plans, according to this study -- the largest, most comprehensive examination of 401k saving and investing behaviors of African-American, Hispanic, Asian and white employees.
Source: Ariel Investments , November 2009.
Target-Date Funds Survey - Summary: This is the published reults of a recent survey conducted be PSCA on target-date funds. PSCA received 397 responses from plan sponsors. 54.8 percent of responding companies have more than 1,000 participants.
Source: Profit Sharing/401k Council of America , November 2009.
401k Plan Asset Allocation, Account Balances, and Loan Activity in 2008 - Summary: Because 401k balances can fluctuate with market returns from year to year, meaningful analysis of 401k plans must examine how participants' accounts have performed over the long term. This study looks at consistent participants in the EBRI/ICI 401k database over the five-year period from 2003 to 2008 and reports on the findings.
Source: Investment Company Institute , October 2009.
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