Survey Finds Participant Choice, Access Increase

September 29, 2000 ( - Participants continue to have more choices, and more ways to exercise them, with nearly two-thirds (64%) of plans offering plan information on the Internet according to a new survey. A year earlier just 44.1% of plans offered that choice.

Balance inquiries (62.9%) and investment changes (60.2%) were the most common Internet options, according to the 43rd Annual Survey of Profit Sharing and 401(k) Plans.

On the other hand, Intranet usage continues to be something of a rarity, with just 7.4% of plans offering that option, according to the survey. However, that is nearly twice the 4.1% that made that available a year earlier.


Some 4.2% of plans now offer automatic enrollment, though it is much more prevalent in plans with more than 5,000 participants. 17.3% of those plans offer the option. Of plans offering this option 40% use an assumed deferral rate of 3%, the most common choice.

Employee pre-tax deferrals average 5.4% for non-highly compensated workers, up from 5.1% of pay a year ago and 4.2% in 1991.

Employer contributions averaged 4.7% of payroll, but were 8.6% of pay in profit-sharing plans and just 3.3% of pay in 401(k) plans. As a percentage of payroll, employer contributions to 401(k) plans represented 14.1% of total net profit, compared with 25.9% for profit-sharing programs.

Options Increase

Over half (51.2%) of respondent plans offer 10 or more investment choices to participants, up significantly from 1998’s 28.8%. The average number of funds available is 11.5. Over three-fourths (75.7%) offered daily valuation.

Actively managed domestic equity funds were offered by 85.7% of plans, compared with 73.2% that offered actively managed international equity funds and the 72.7% that offered balanced funds. Just 67.7% offered indexed domestic equity funds.

Respondent plan asset allocations were:

  • 77% in equities
  • 7.5% in stable value
  • 2.6% in cash equivalents

Stocking Up

In plans with 5,000 or more participants, nearly half of assets were invested in company stock (46.4% of assets), with actively managed domestic equity funds (13.8%), indexed domestic equity funds (11.0%), balanced funds (10.8%) and stable value funds comprising 7.1%.

In plans with less than 5,000 participants, assets were most commonly invested in actively managed domestic equities (38.2% of assets), company stock (16.7% of assets) and stable value funds (10.5% of assets).


The vast majority of 401(k) plans (82.4%) offer loans. On average a quarter of participants have an outstanding loan, with an average loan balance of $5,936. Loan balances are 1.4% of plan assets in plans where they are offered.

Nearly a third (29.6%) of 401(k) plans now offer immediate vesting.

Service Providers

Large plans are much more likely to have a bank trustee (54.8%), while plans with less than 50 participants are generally (74.9%) self-trusteed.

Recordkeeping services are provided most often by

  • third party administrators (26.1%)
  • banks (14.3%)
  • mutual funds (13.2%)

14.1% of plans use more than one recordkeeper.

– Nevin Adams