| | Benefits & Administration | | Unbundled Plans Gained Significant Ground in 2017 | | The proportion of defined contribution (DC) plans that at least partially bundle their services fell dramatically from 53.8% in 2016 to 44.0% in 2017, a continuation of the unbundling trend, according to Callan’s 2018 DC Survey. Today, just 8.8% of “mega plans” with assets greater than $1 billion utilize a fully bundled structure. The research also found most DC plans—including both ERISA-governed plans and those voluntarily seeking to follow the Employee Retirement Income Security Act (ERISA)—seek to be in compliance with ERISA section 404(c).Read more > | | Fiduciary Questions Still Stymie In-Plan Income for Many Sponsors | | According to Callan’s 2018 DC survey, most DC plan sponsors (79.6%) have taken steps in the recent past to prevent plan leakage, but they have met only moderate success. Some of the more common strategies observed by Callan researchers included offering partial distributions and encouraging rollovers in from other qualified plans, which tied for the most common strategies cited by plan sponsors, both at 56%. Tied to the leakage challenge, Callan reports two-thirds of plans now offer a retirement income solution to employees. Of those that offer in-plan guaranteed income products, 60% are government plans, suggesting corporate America is still somewhat hesitant to turn DC plans into pension-like vehicles for retirees. Plan sponsors cite a number of reasons for being unlikely to offer an annuity-type product in the near term, with top reasons including the belief that it is unnecessary or not a priority, and being uncomfortable or unclear about the fiduciary implications.Read more > |
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