class=”Default0″> A new study from Charles Schwab and CFO Research Services found that a scant 16% of CFOs polled mentioned plan administration expenses as a major problem, according to a Schwab news release. More substantive problems, according to the finance executives, were current economic conditions (48%) and potential fiduciary or legal liability of the employer (44%).
class=”Default0″> Fielding a 401(k) plan may not be all wine and roses for the corporate staff responsible for its administration, but of the 200 large-company senior finance officials polled, an overwhelming 84% declared that the potential corporate hazards were still very much worth it
class=”Default0″> Not only are 401(k) plans a boost for recruiting and retention, nearly seven in 10 say they enhance an organization’s reputation and nearly six in 10 said a 401(k) contributes to a company’s long-term financial health. Some 70% of respondents believe that offering a 401(k) “is the right thing to do for employees” and mirrors their company’s values.
class=”Default0″> Given the C-suite recognition of a 401(k) plan’s benefits, it is not surprising that the finance chiefs vow to continue beefing up their organization’s support. Sixty percent say they are plugging more into their 401(k) plans than they did five years ago, and 55% said they anticipate continuing to add resources in years to come.“As the 401(k) and other employer-sponsored plans play a greater role in Americans’ financial futures, we are seeing more companies look for ways to provide greater service and support for their employees,” said Jim McCool, executive vice president of Schwab Corporate & Retirement Services, in the news release. “But it is also interesting to see the number of senior finance executives who view their corporate retirement plan as highly beneficial to their company’s image and financial success.”
class="Default0"> The survey also explored the CFOs' sense of how much responsibility for employees' retirement readiness rests with employers and how much rests with workers. S enior finance executives view enrollment in 401(k) plans as a shared responsibility between employer and employee but feel it is incumbent on the employer to educate employees about the benefits of the plan, features, restrictions and costs, the news release said.
class="Default0"> Nearly nine out of 10 (87%) of those surveyed feel it is important to provide employees with investment advice to help them make at least some of these decisions.
class="Default0"> In addition to advice, respondents ranked employer matching contribution (96%) and a vailability of target date funds (81%) as the most important plan features for an effective workplace retirement plan offering.
class="Default0"> Respondents say their employees should be taking the reins when it comes to ongoing management of their 401(k) accounts, increasing their savings rates, and tackling other financial issues such as debt management and financial planning beyond a 401(k). But, McCool adds, "There was overwhelming agreement that employees shouldn't have to go it alone."
class="Default0"> In June 2008, CFO Research Services conducted an online survey and gathered a total of 208 responses from senior finance executives at companies ranging from $100 million to more than $10 billion in revenue. Respondents work for companies in a broad cross-section of industries, with the manufacturing and wholesale/retail trade industries particularly well represented
The full study is available at http://www.aboutschwab.com/press/research/index.html .