Benefits December 24, 2001

HR and Finance Depts. Influence Plans Differently

December 24, 2001 (PLANSPONSOR.com) - Both the Human Resources and Finance departments are strong players in decisions relating to their organization's retirement plan choice, according to a survey by William M Mercer.

Reported by

Camilla Klein

The Survey on Employee Savings Plans 2000 – 2001 found that:

in 45% of the sample companies, HR plays a greater role than finance
both departments are essential in 40% of the companies
in 15% of companies, finance wields the greater influence.

In all three of these groups, the level and the maximum of the match offered are similar, while in companies where the role of the Finance department is greater, employer contributions are more likely to be made on a discretionary basis.

The survey also found that companies with greater HR influence are:

more likely to invest employer contributions in employer stock than those with greater Finance influence
have lower age, service, and vesting requirements.

In terms of plan administration, these companies also

have more services performed by the recordkeeper without the plan sponsor’s intervention
monitor the recordkeeper’s performance more often.

While companies where the Finance department calls the shots:

are more likely to have set performance standards for their recordkeepers
monitor compliance with plan provisions more often.

The sample comprised responses from 252 organizations. The assets of the surveyed plans totaled $125 billion, and the average number of eligible employees per plan surveyed was 8,100.