A news release said that the survey conducted by the Committee on Investment of Employee Benefit Assets (CIEBA), an affiliate of the Association for Financial Professionals, found that CIEBA member plan sponsors contributed $22 billion in 2004. That was almost $6,000 per active participant, with 83% of those surveyed making some contribution to their plans. The median funding level for CIEBA plans in 2004 was 91% compared to 88% the year before.
In the defined contribution arena, employer and employee contributions per active employee increased for the tenth consecutive year, according to the report. The combined total per employee was $7,875 in 2004 compared to $7,047 in 2003. Of those amounts, $2,249 was contributed by employers in 2004, compared to $2,178 in 2003.
Assets in both DB and DC plans increased from beginning year levels by 7% and 8% respectively. Investment returns account for much of the increase, although DB asset increases also reflect significant corporate contributions, the report said. The average investment return for DB plans was approximately 12% (net of all expenses) of beginning of year assets, compared to an average of nearly 10% (net of fees) for DC plan accounts.
Additional survey findings include:
- Benefit payments totaled $90 billion in 2004, of which $56 billion was paid to DB participants and $34 billion to DC participants.
- DB plan assets were allocated 42% to US equity, 19% to international equity, 28% to fixed income and 12% to other investments. DC plan assets were allocated 34% to diversified equity portfolios, 28% to employer stock, 27% to fixed income, 8% to balanced funds and 3% to other options and loans. DC plan diversified equity allocations increased from 2003 by 2 percentage points, while allocations to company stock decreased a similar amount.
- Most DB assets (84%) were actively managed compared to approximately half (52%) of DC assets.
- A significant percentage of CIEBA members now offer some form of advice to DC plan participants. Individual financial planning assistance and interactive advisory programs were offered by 25% and 35% of DC plan sponsors, respectively. Five percent (5%) offered professionally managed participant accounts.
The Committee on Investment of Employee Benefit Assets (CIEBA) is a forum for corporate pension plan sponsors on fiduciary and investment matters.