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Web Still Rules as Premier K Plan Cost Cutter
Sponsors participating in IOMA’s 2002 Controlling 401 (k) Plan Costs and Salary Survey cited the Web five times out of the top 10. Leading the way were Web-based investment changes at 37.4% overall, up from the 33.6% last year.
Other Web-based services that helped control costs in the top 10 responses given were:
- investment education (24%), down a hair from the 24.3% who cited it last year
- loans (22.9%), down somewhat from last year’s 26.3%
- deferral changes, (19%), down notably from last year’s 25.9% figure
- plan enrollment (16.8%), down from 20.6% last year.
In all but Web-based investment changes, 401(k) plan sponsors with 1,000 to 4,999 participants were much more likely to embrace Web-based technology and cited its effectiveness in cost control much more than other size groups.
Sponsors with 1,000 to 4,999 participants were nearly:
- one-third again as likely as the overall percentage to offer Web-based investment education
- more than one-third as likely to offer Web-based loans, at 39.5%
- more than 60% more likely to offer Web-based deferral changes at 31.6%
- nearly twice as likely to offer Web-based plan enrollment.
The only exception to the 1,000 to 4,999 sponsor-size dominance of Web-based 401(k) features was Web-based investment changes.
Across the board, private practice firms embraced Web-based services as a means to help control their 401(k) costs. About 54% of private practice firms use the Web for investment changes versus the 37.4% of firms overall that did.
Similar patterns held true for investment education (30.8% vs. 24.0%), loans (34.5% vs. 22.9%), deferral changes (38.5% vs. 19%), and plan enrollment (23.1% vs. 16.8%).