A press release on the survey results said CIEBA members contributed $23 billion to their DB plans in 2005, more than $5,500 per active participant. Employer contributions to DC plans equaled almost $2,300 per active employee.
Survey results also showed DB plans continue to be central to the provision of retirement income for plan participants. DB plans had 67% more assets than DC offerings of sponsors surveyed and paid out 38% more in benefits, the release said. Benefit payments totaled $97 billion in 2005, of which $56 billion was paid to DB participants and $41 billion to DC participants.
Assets in DB plans increased from beginning year levels by 5%, largely due to investment returns. Assets in DC plans increased by 2%, largely due to contributions. The average investment return for DB plans was 9.3% (net of all expenses) compared to an average of 4.7% (net of fees) for DC plan accounts.
For DC plans the combined total of employer and employee contributions per active employee increased to $8,027 in 2005, compared to $7,875 in 2004.
Additional survey findings included:
- DB plan assets were invested as follows: 38% to US equity, 21% to international equity, 28% to fixed income/cash, and 13% to other investments.
- DC plan assets were invested as follows: 36% to diversified equity portfolios, 25% to employer stock, 27% to fixed income, 8% to balanced funds, and 4% to other options and loans. Company stock allocations have steadily declined since 2001 when 36% of DC assets were in company stock.
- 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 28% and 39% of DC plan sponsors, respectively. Ten percent offered professionally managed participant accounts.
The survey covered 112 corporate plan sponsors responsible for the management of $852 billion in pension assets and $511 billion in defined contribution plan assets. Plans in the survey cover 10.6 million DB plan participants and 5.5 million DC plan participants.
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