In fact, more than 82% of 307 plan sponsor respondents chose to outsource those services to a third party, compared with just:
- 8.4% that assigned that work to their bundled DB provider,
- 4.2% that used their defined contribution provider, and
- 5.0% that relied on in-house resources.
Trustee services were most likely to be assigned to respondents’ bundled DB provider, but only by 16.6%. DB administration was close behind, with 13.1% of the respondents giving that work to their bundled DB provider, and 12.9% using their bundled DB provider for investment management. Other services assigned to a bundled DB provider were:
- 10.0% – advisory services
- 9.5% – compliance
- 9.2% – investment consulting
- 7.3% – employee education
- 6.3% – plan design
- 3.7% – non-qualified plan
From a plan design perspective, 14.4% of respondents already have a cash balance plan, while a like 15.1% are considering adding or switching to such a program. However, more than 70% say they are not considering such a move.
Defined benefit plan concerns were, unsurprisingly, focused on investment returns, cited by a third of survey respondents, and funding (28.7%). Costs/fees were cited by 6.1%, while increasing participant satisfaction was a concern for just 3.2%.
Education/advice topped the list of defined contribution plan concerns, noted by 26% of survey respondents. Participant satisfaction was second on the list, cited by nearly one in five, followed closely by the 18.8% that were concerned about participation. Other concerns included:
- 9.6% – investment options
- 6.8% – costs/fees
- 6.2% – compliance
- 5.8% – other
The survey data is online at http://www.plansponsor.com/uploadfiles/MassMutmarch2003.pdf