What Are the Top Trends from PSCA's Annual Survey?: PSCA National

On Day One of PSCA National, plan sponsors came with questions about Roths and continued education on all things SECURE, which were themes of the Connect Data from PSCA's Four Annual Surveys to Benchmark Your Retirement Program session. 

Survey data waspresented by Hattie Greenan, Director of Research & Communications for PSCA. For the uninitiated, PSCA has four annual surveys and a question of the week. The four yearly surveys are on 401(k), 403(b), HSA, and NQDC. The presentation focused on the 65th annual survey results. 

Greenan explained that 90% of 401(k) plans now offer Roth options, with 30% of participants making Roth contributions when it's provided, while 403(b) plans offer Roth options just under 60% of the time. 

"About [50%] of large plans are offering automatic enrollment while not as many [for] smaller companies. And I think that's education," Greenan explained. 

"With the SECURE provision mandating automatic enrollment, I think we're gonna see that increase over time," she added.

Investment lineups since 2012 have been relatively stable, with a slight bump from 19 to 21 in 2020. These lineups generally include:

• 1-2 bond funds
• 2-3 asset allocation / balanced funds
• 5 actively managed domestic equity funds and 2 actively managed international equity funds. 
• 3 indexed domestic equity funds and 1 indexed international equity
• 1 indexed international equity
• 1 target-date series
• May see alternatives such as real estate or other sector funds. Large companies may have company stock. 
• Maybe a brokerage window. 

A number of education-related questions were asked during the session, with many looking for ways to increase their ability to do it and how it could be incentivized. Ideas included exploring how to educate employees on the benefits of signing up for an HSA account, with some employers suggesting educational videos. If employees were to engage with the videos, alongside free open enrollment—the employer might provide them with additional funding to seed their HSA account. 

Roughly 30% of employers position their HSAs as retirement savings vehicles in addition to health care spending. It would make sense for the HSA to be positioned alongside retirement benefits to provide one quick explanation of savings and compounding, presenters stated. 

Highlights from the NQDC Survey included the reasons for offering the plan. For nearly 40% of plan sponsors, it's all about a competitive benefits package, and for 22%, helping eligible employees accumulate assets. 

"The point of these programs is to attract and retain key talent," Matthew Maier, Lockton Investment Advisors and PSCA Leadership Council, said. 

The percentage of employees eligible to participate is low, with participation at 5.6%. The biggest reason? A large part of the eligibility criteria is part of the job title/position. 

"The way that these programs are designed is to provide savings opportunities, whether it's voluntary, or from the company on their behalf, to save above and beyond qualified plan limits, so above 401(k) limits and above [a] DB plan," Maier said. 

One important note from the session was about survey participation. Once respondents complete the survey, it will auto-populate in subsequent years, allowing them to collect essentially one free CE credit every year. 

SAVE THE DATE: PSCA National Conference - May 15-17, 2024 in Salt Lake City, Utah.