55th Annual Survey Highlights
The average plan has approximately 60.6 percent of assets invested in equities. Assets are most frequently invested in actively managed domestic equity funds (24.8 percent of assets), target-date funds (12.4 percent), stable value funds (10.7 percent), indexed domestic equity funds (8.8 percent), and actively managed bond funds (8.0 percent).
45.9 percent of plans have an automatic enrollment feature. The most common default deferral is 3 percent of pay, present in 53.9 percent of plans. 55.2 percent of plans with automatic enrollment automatically increase default deferral rates over time. The most common default investment option is a target retirement date fund, present in 69.7 percent of plans.
Companies contributed an average of 4.1 percent of participants’ pay to the plan in 2011. Profit sharing plans tend to offer the most generous contributions, averaging 8.5 percent of pay. The average company contribution in 401(k) plans is 2.5 percent of pay and in combination plans it is 4.4 percent of pay. 95.5 percent of plans that have a match provision in the plan, made the match in 2011, up from 91.0 percent in 2010.
15.5 percent of plans allow company stock as an investment option for both participant and company contributions. 2.8 percent of plans allow company stock as an investment option for company contributions only.
88.4 percent of U.S. employees at respondent companies are eligible to participate in their employer’s DC plan. More than half of respondent companies provide plan eligibility to all employee types.Most companies allow employees to begin contributing to the plan immediately upon hire (60.3 percent of companies). 45.9 percent of companies that provide a matching company contribution provide immediate eligibility to receive the match, while 28.2 percent require one year of service prior to eligibility to receive it.
Hardship withdrawals are permitted in 90.5 percent of 401(k), 87.4 percent of combination, and 5.9 percent of profit sharing plans. 1.8 percent of participants took a hardship withdrawal in 2011, when permitted.
Investment advice is offered by 57.8 percent of respondent companies. 19.3 percent of participants used advice when it was offered. Participant usage tends to be greatest in small plans.
68.2 percent of companies retain an independent investment advisor to assist with fiduciary responsibility.
Plans offer an average of 19 funds for both participant contributions and for company contributions. The funds most commonly offered to participants are actively managed domestic equity funds (90.3 percent of plans), actively managed international equity funds (87.4 percent of plans), indexed domestic equity funds (82.8 percent of plans), and actively managed domestic bond funds (79.6 percent of plans).
Loans are most prevalent in plans permitting participant contributions. They are permitted in 89.0 percent of 401(k), 88.4 percent of combination, and 17.6 percent of profit sharing plans. 54.0 percent of plans with loans permit only one loan at a time.
Non-qualified supplements are rare in small plans, but common in more than two-thirds of large plans (69.3 percent).
The average percentage of eligible employees who have a balance in the plan is 85.9 percent. An average of 79.5 percent of eligible employees made contributions to the plan in 2011, when permitted.
Among plans that permit participant contributions, 49.0 percent allow participants to make Roth after-tax contributions. 17.4 percent of participants made Roth contributions when offered the opportunity. The average Roth deferral (from ADP test results) was 3.7 percent by lower-paid participants and 4.9 percent by higher-paid participants.
68.6 percent of plans offer a target-date fund as an investment options. The average allocation of plan assets is 12.4 percent.
38.9 percent of plans provide immediate vesting for matching contributions, while 23.9 percent provide immediate vesting for profit sharing contributions. Among plans that do not have immediate vesting, graduated vesting is the most common arrangement for all contribution types.