Small Organization Stress and PSCA's Surveys

Small organization response to PSCA's 403(b) and 401(k) surveys has fallen significantly this year. In organizations of less than 200 participants it was down a third in the 403(b) survey and a quarter in the 401(k) survey. At the same time participation was stable in the 403(b) survey and up in the 401(k) survey for organizations with more than 200 participants. I am concerned that this shows the current economic situation is taking its toll on small employers. According to Form 5500 data the number of companies with DC plans with from 10 to 249 participants grew steadily through 2009 when there were 366,746 of these small plan sponsors. There is not similar DOL data for non-profit organizations but I believe the number of non-profits sponsoring DC also was growing through 2009.

Unfortunately, sponsoring a DC plan is far more onerous for small employers than larger ones. For example, a small employers plan's oversight is a senior management responsibility. There is no one else. The larger the organization the more likely the administration and supervision of the plan is delegated down. Since small organization success is disproportionately dependent on the time and effort of those running the organization, every hour away from the organization's core focus can diminish the organization's success. We need to treasure and nurture our small plan sponsors.

What happened to those small employers who usually participate in our surveys? Have they gone out of business? Are they on the edge with no time to participate? Have they cut back on the commitment to their plans? Whatever is going on is not good news.