CIEBA, an affiliate of the Association of Finance Professionals representing large plan sponsors, also found that both types of plans were substantially invested in equities.
- DB plans had 60% allocated to equities, while
- DC plans had approximately 70% in equity investments
According to the survey 99% of CIEBA’s members offer both DB and DC plans, with DB plans representing the primary plan type. In comparison to DC plans, these types of plans had:
- over 65% more assets,
- covered 74% more participants and
- paid out 18% more in benefits
While DB plans are the dominant plan type for CIEBA members, the number of participants in DC plans is increasing at a faster rate than those in DB plans, with participation in DC plans by eligible employees reaching 85% in 2000.
According to the survey, for the sixth consecutive year,
- DB plan benefit payments continued to represent about 6% of year-end assets,
- while DC plan benefit payments continued to exceed contributions, representing 9% of year-end assets
DC plan contributions averaged almost $6,000 per active employee with 30% provided in employer match.
At the close of 2000, 17% of pension plan and 16% of DC plan assets were managed internally. Over 80% of DB plan assets were actively managed, compared to 42% of DC plan assets.
The survey also found that the number of plan sponsors who use Web sites to communicate with plan participants increased from 66% in 1999 to 86% in 2000.
In addition, while over 80% of plan sponsors provided some type of investment education,
- less than 30% of the surveyed companies make individual financial planning available, and
- only 21% provided some type of interactive software advisory program
The CIEBA survey covered more than 115 corporate plan sponsors with over $1.3 trillion in assets. This total includes $884 billion in defined benefit assets and $509 billion in defined contribution plan assets, providing benefits for more than 16.5 million participants and beneficiaries.