Provider Picks a 'Do It Yourself' Project
According to the 2001 Controlling 401(k) Plan Costs and Salary Survey from the Institute of Management & Administration (IOMA), nearly 90% of the 245 respondents handle providers themselves.
401(k) plan managers also told IOMA that they keep close tabs on plan enrollment (69.9% handle in-house) and fiduciary responsibilities (69.6% handled in-house), but are more likely to let go of participant statements, recordkeeping, and discrimination testing.
A More Detailed View
The survey also found that:
About 92% of respondents report that they outsource participant statements, 80.2% outsource recordkeeping, and 74.3% do so with discrimination testing.
Participant loans, trustee responsibilities, and employee communications are outsourced by about half of all respondents
Slightly more than half (53.3%), meanwhile, keep investment oversight in-house and an additional 6.2% rely on both inside and outside resources.
Smaller ‘Stuff’
Overall, smaller firms are more inclined to handle plan enrollment, recordkeeping, participant education, participant loans and trustee responsibilities.
Smaller firms with up to 99 participants were more likely to:
- select/hire/fire service providers (100% versus the average 89.5%)
- handle plan enrollment (84.9% versus 73.2% overall)
- act as plan trustee (70.4% versus 43.5%)
- handle participant loans (48.3% versus 35.1%)
- conduct participant education (46.9% versus 36.5%)
- handle recordkeeping (27.6% versus 10.1% overall).
Fred Schneyer editors@plansponsor.com