Nearly all (98%) of the 200 large employers surveyed by Hewitt Associates concur that helping ensure that employees appreciate their 401(k) plan and understand how it works, coupled with managing employees’ total use of the plan is a top priority for 2003.
Targeted communication was the most commonly cited (99%) means to that end, while plan structure changes were a more distant second place, cited by 67%.
According to Hewitt’s research, a nearly comparable 97% of employers agree that seeking to reduce the risk of liability and exposure to lawsuits is a priority next year. In fact, 61% of those strongly agreed with that premise. As for ways to manage that risk, employers cited:
- 31% – reducing risk according to upcoming legislation requirements
- 25% – increasing fiduciary scrutiny of plan structure and providers
- 17% – finding ways to outsource investment manager oversight and
- 16% – implementing/revising the plan’s investment policy statement
Helping workers with their retirement planning efforts continues to loom large on employers’ radar screens, with 94% saying that finding additional ways to support those efforts is an important concern of theirs. Increased communication about retirement income security and providing access to expert information or help were the most popular ways cited to support employees, according to the survey.
Eighty-three percent of employer respondents agreed with the premise that finding ways to reduce employee’s total investment in company stock will be a 2003 priority. Among those, eliminating or reducing transfer restrictions on the company match in company stock was citedby 38% as the most important way to do this.
Finding ways to offer objective, third-party investment advice appears to have increased in importance for plan sponsors, compared with prior Hewitt surveys. Most (82%) agree that offering advice is a priority for next year. As for how to deal with that:
- 52% say that using a third-party online advice provider is the way to go
- 24% say that using asset allocation-based guidance is the most important way
Of course, the necessary counterweight for all these objectives is decreasing total plan costs, cited by nearly three-quarters of plan sponsors (74%) as a key 2003 priority.
Most (83%) will not focus on simplifying investment options, and nearly two-thirds (63%) say that the number of investment options in their plan will stay the same in 2003. However, a third say that the number of investment options will likely increase by the end of next year.
Copies of Hewitt’s survey findings, Plan Sponsor Priorities 2003, are available by contacting the
Publications Desk at Hewitt Associates, 100 Half Day Road, Lincolnshire, IL, 60069, (847) 295-
5000 or firstname.lastname@example.org .