Chicago (September 28, 2001) – The Profit Sharing/401(k) Council of America has released it’s 44th Annual Survey of Profit Sharing and 401(k) Plans, which provides the most up-to-date information available on current practices and trends in profit sharing and 401(k) plans. PSCA's annual survey reports on the 2000 plan year experience of 909 plans with over 2.8 million participants and more than $212 billion in plan assets. The plans represented in this survey are diverse, including companies of all sizes and regions across the United States. This year’s annual survey covers many important topics, including eligibility, participation rates, participant deferrals, company contributions, investment options, asset allocation, advice, education, Internet usage, investment policy statements, and more. PSCA’s annual surveys are frequently used by companies to provide benchmarks for their plans and by the government as a resource for public policy decisions. Following are some highlights from the survey: Employee participation
80.2% of eligible employees have balances in their 401(k) plan. Pre-tax participant deferrals average 5.3% of pay for non-highly compensated workers and 6.4% of pay for highly compensated workers. The average dollar amount contributed by contributing participants in 2000 was $3,806. Company contributions
Company contributions average 4.6% of payroll. They are highest in profit sharing plans (8.2% of pay) and lowest in 401(k) plans (2.5% of pay). Numerous formulas are utilized to determine company contributions. In plans permitting participant contributions, the most common formula is a fixed match only, present in 22.6% of plans (including plans with safe harbor matches). The most common type of company contribution for profit sharing plans is a discretionary profit sharing contribution only, present in 57.1% of plans. For plans with fixed matches, the most common matches are $.50 per $1.00 up to the first 6% of pay (26.9% of plans), $.50 per $1.00 up to the first 4% of pay (8.0% of plans) and $1.00 per $1.00 up to the first 3% of pay (7.8% of plans). Automatic enrollment
8.1% of respondents have automatic enrollment. Automatic enrollment is most common in large plans – 19.8% of plans with 5,000 or more participants report having automatic enrollment, while only 2.0% of plans with fewer than 50 participants have automatic enrollment. Investment advice
Investment advice is offered in 35.3% of plans. It is most prevalent in small companies (50.3%) and least prevalent in large companies (18.1%). The most common types of advice offered are one on one counseling (53.5%), Internet providers (34.2%) and telephone hotlines (24.8%). Increasing number of investment options
The number of funds offered to plan participants continues to increase. 61.5% of plans offer 10 or more funds for participant contributions, up from 51.2% in 1999 and 38.8% in 1998. The average number of funds available for participant contributions is 13. Investment options available
The funds most commonly offered for participant contributions are actively managed domestic equity funds (79.0% of plans), actively managed international equity funds (73.1% of plans), balanced stock/bond funds (70.3% of plans) and indexed domestic equity funds (64.9% of plans). Approximately 75% of plan assets are invested in equities. 10.2% of assets are invested in stable value funds and 3.4% in cash equivalents. Self-directed accounts
6.8% of plans offer a self-directed mutual fund window, and 10.7% offer a self-directed brokerage (stock) window. 0.5% of total plan assets are invested through self-directed accounts. Investment policy statements
62.0% of respondents indicated having an investment policy statement, up from 54.3% of plans in 1999. 10.4% of respondents indicated being either unsure of whether their plan had such a statement, or that they were unfamiliar with the term, down from 14.2% in 1999. Of those who have an investment policy statement, monitoring occurs most often quarterly (43.4%) or annually (39.6%). Vesting
Immediate vesting is present in 37.6% of 401(k), 24.1% of combination, and 9.8% of profit sharing plans. Graduated vesting is the most common type of vesting for all plan types. Increase in use of technology
The use of Internet in plan administration continues to increase rapidly; 79.3% of plans permit participants to make some type of transaction via the Internet, up from only 64.0% of plans in 1999. Intranet is used in 7.4% of plans. |