2021
DC Plan Benchmarking Survey

2021 Survey

2021 Survey

Respondent Profile

Respondents, by Geography

New England
6%
Mid-Atlantic
15%
South Atlantic
16%
East South Central
4%
West South Central
9%
East North Central
21%
West North Central
9%
Mountain
6%
Pacific
13%

Respondents, by Plan Size

<$5MM
36%
$5MM – $50MM
38%
>$50MM – $200MM
13%
>$200MM – $1B
7%
>$1B
6%

Respondents, by Plan Type Offered

401(k)
92%
403(b)
9%
457
10%
Profit Sharing
18%
Nonqualified Deferred Compensation (NQDC)
10%
All Other Plan Types
8%

Respondents, by Recordkeeper Category

5 Largest Providers
14%
Next 5 Largest Providers
14%
Next 10 Largest Providers
41%
All Other Providers
31%

Respondents, by Industry

"Other" category is spread across 33 other unique industries.
Manufacturing
14%
Health Care
11%
Banking / Financial Services
7%
Building / Construction
6%
Law
6%
Retail
6%
Technology / Telecommunications
5%
Wholesale / Distribution
5%
Government
3%
Other
36%



Plan Sizes

It has long been known that plan size correlates to differences in plan design, with larger plans—i.e., those with $200 million or more in plan assets—adopting more progressive features long before their smaller counterparts. Larger plans were among the first to adopt automatic enrollment and remain twice as likely to offer the feature today. They also come with a size and scale that can lead to higher levels of plan oversight and lower investment fees. Collectively, plan size may be the most important yardstick by which to benchmark your retirement plan.

Offers Automatic Enrollment

<$5MM
22%
$5MM – $50MM
47%
>$50MM – $200MM
66%
>$200MM – $1B
83%
>$1B
89%

Uses a Default Deferral Rate of Less Than or Equal to 3% of Salary

<$5MM
65%
$5MM – $50MM
51%
>$50MM – $200MM
44%
>$200MM – $1B
33%
>$1B
35%

Uses a Target-Date Fund as a Default Investment

<$5MM
68%
$5MM – $50MM
76%
>$50MM – $200MM
67%
>$200MM – $1B
82%
>$1B
91%

Uses an Investment Committee for DC Plan

<$5MM
41%
$5MM – $50MM
79%
>$50MM – $200MM
97%
>$200MM – $1B
96%
>$1B
100%

Uses an Investment Policy Statement for DC Plan

<$5MM
57%
$5MM – $50MM
81%
>$50MM – $200MM
90%
>$200MM – $1B
89%
>$1B
97%

Average Asset-Weighted Expense Ratio of All Investment Options

<25 bps
25–50 bps
>50 bps
<$5MM
26%
42%
32%
$5MM – $50MM
26%
36%
38%
>$50MM – $200MM
24%
46%
30%
>$200MM – $1B
25%
50%
25%
>$1B
55%
42%
3%

 



Plan Types

The 401(k) plan is by far the most common employer-sponsored retirement plan. Not surprisingly, this also means that 401(k) plan benchmarking data is often easier to come by than similar data focused on 403(b), 457 or other retirement plans. However, plan types—like industries—are commonly connected to specific employee populations. They are also subject to different regulatory requirements. Combined, these factors can lead to different plan design considerations, most notably in areas related to eligibility, retirement income creation, and in-person advice and guidance.

Offers Systematic Withdrawals at Retirement

401(k)
45%
403(b)
61%
457
67%

Offers In-Plan Retirement Income Products

401(k)
11%
403(b)
29%
457
27%

Offers Plans With Immediate Eligibility Upon Hiring

401(k)
38%
403(b)
81%
457
73%

Offers Participants One-on-One Meetings With Financial Planner/Adviser Outside of the Plan

401(k)
51%
403(b)
66%
457
60%

 



Plan Providers

Many DC plan recordkeepers service thousands of plans, allowing them to construct proprietary benchmarks based on actions their clients take. But this may also exhibit “hidden” bias, as clients share the common trait of having self-selected into the same grouping—e.g., the charts below show adoption of certain plan features based on responses from six recordkeepers similar in survey counts and response profiles. The range of values highlights the potential limitations of single-provider benchmarks and reinforces the key role independent, cross-provider sources play in the process.

Clients That Offer Defined Contribution Plan and Health Savings Accounts

Provider A
47%
Provider B
51%
Provider C
74%
Provider D
54%
Provider E
38%
Provider F
52%

Clients That Use a Safe Harbor Plan Design

Provider A
63%
Provider B
50%
Provider C
44%
Provider D
51%
Provider E
64%
Provider F
48%

Clients That Use a Default Deferral Rate of Less Than or Equal to 3 Percent of Salary

Provider A
42%
Provider B
50%
Provider C
42%
Provider D
39%
Provider E
49%
Provider F
58%

Clients That Offer Automatic Escalation

i.e., automatic deferral increases
Provider A
52%
Provider B
63%
Provider C
75%
Provider D
41%
Provider E
18%
Provider F
50%

Clients That Place a Limit on Automatic Escalation

Provider A
86%
Provider B
68%
Provider C
74%
Provider D
71%
Provider E
80%
Provider F
88%

 



Geography

Recent politics might lead some sponsors to believe their plan designs need to account for regional leanings. However, many design features show only small differences in adoption when viewed on a regional basis. While common plan success measures—e.g., plan participation rates, participant deferral rates and average participant account balances—are consistent across many regions, it is worth noting that Southern states underperform their peers in these areas, which suggests that sponsors in that region may want to consider other factors when looking to improve outcomes.

Plan Participation Rate (Median Value)

All Regions
87.0%
New England
87.0%
Mid-Atlantic
88.0%
South Atlantic
81.0%
East South Central
86.0%
West South Central
85.0%
East North Central
89.0%
West North Central
91.0%
Mountain
87.5%
Pacific
84.5%
Source for regions: www.census.gov/prod/1/gen/95statab/preface.pdf

Participant Deferral Rate (Median Average Value)

All Regions
6.8%
New England
7.0%
Mid-Atlantic
7.0%
South Atlantic
6.5%
East South Central
6.4%
West South Central
6.4%
East North Central
6.9%
West North Central
6.9%
Mountain
7.0%
Pacific
7.0%
Source for regions: www.census.gov/prod/1/gen/95statab/preface.pdf

Participant Account Balance (Median Average Value)

All Regions
$79,970
New England
$84,762
Mid-Atlantic
$100,000
South Atlantic
$71,860
East South Central
$71,000
West South Central
$73,004
East North Central
$77,000
West North Central
$90,775
Mountain
$72,042
Pacific
$73,938
Source for regions: www.census.gov/prod/1/gen/95statab/preface.pdf

 



Industry

Employers primarily compete for talent within an industry context and need to offer retirement programs that attract and retain the right people, which means finding a relevant group of peers/competitors is a critical part of any plan benchmarking exercise. For example, employees of retail organizations likely have needs and expectations that differ from those in white-collar industries such as law firms. So that gives rise to differences in plan design—e.g., law firms are more likely to use re-enrollment and offer profit-sharing contributions and Roth conversions.

Offers Nonelective or Profit-Sharing Contributions

These contributions generally do not require participant contributions
Building / Construction
59%
Banking / Financial Services
62%
Health Care
64%
Law
83%
Manufacturing – Consumer Products
47%
Manufucturing – Industrial Products
39%
Retail
46%
Technology / Telecommunications
45%
Wholesale / Distribution
35%
All Other Industries
48%

Allows In-Plan Roth Conversions for Its DC Plan/s

Building / Construction
40%
Banking / Financial Services
63%
Health Care
42%
Law
63%
Manufacturing – Consumer Products
52%
Manufacturing – Industrial Products
31%
Retail
39%
Technology / Telecommunications
48%
Wholesale / Distribution
47%
All Other Industries
42%

Has Used/Tried ‘Re-enrollment’ in the Past 3 Years

i.e., re-enrolling employees not participating in the plan, requiring them to opt out again or else be enrolled
Building / Construction
5%
Banking / Financial Services
4%
Health Care
9%
Law
12%
Manufacturing – Consumer Products
22%
Manufacturing – Industrial Products
4%
Retail
13%
Technology / Telecommunications
9%
Wholesale / Distribution
9%
All Other Industries
12%

 

PLANSPONSOR Industry Reports 2022

Unique defined contribution (DC) benchmarking tools based on feedback from roughly 3,000 employers

PLANSPONSOR Industry Reports in a nutshell:

  • 65+ pages in PDF format
  • Cover DC plans in 50 different industries
  • Compare client plans to others in the same industry and asset class, and overall
  • Available with your firm's branding or logo on every page
  • Distributable to sales staff or adviser network; post on your client site behind registration

Availability: December 2021
Contact Rob Reif / 212-217-6906 / robert.reif@issmediasolutions.com