Plan sponsors are often curious about what other sponsors are doing. “How many of your plans use automatic enrollment? And do they use auto escalation?” “Should we set the automatic enrollment default at 3% or some higher rate?” “Do our employees use loans more than other employers’ employees?” “Do you see a lot of plans adding the Roth option?”
The Plan Sponsor Council of America’s most recent annual survey provides some helpful data points that respond to many of those questions:
- The use of automatic enrollment continues to increase. 5% of plans use automatic enrollment.
- Plan sponsors are setting higher default percentages. More than half of automatic enrollment plans use a default rate higher than 3%.
- More plan sponsors are combining automatic enrollment with automatic increase. 3% use auto escalation.
- Fewer plans offered target date funds. Although the percentage of plan assets invested in target date funds increased to 19.8%, plans appear to have become less dependent on them; the percentage of plans offering target date funds fell from almost 70% to 63.2%.
- Participants took out more – and bigger – loans. Approximately 25% of participants had an outstanding loan, and the average loan ballooned by almost 50%, to over $9,000.
- A majority of plans permit Roth contributions. Nearly 60% of plans permit Roth contributions, but only 20% of employees took advantage of the option.
You can find more information about the survey and the Plan Sponsor Council of America by clicking here.
Matthew loves to write. He also loves to think, though he’s probably a better writer than a thinker. He does not like to be on camera or in videos. This blog will allow him to write, challenge his ability to think, and, from time to time, test him with video blog entries.
He has a unique blend of legal and practical experience that helps us to serve our clients well. On the one hand, he has more than 12 years of private legal practice experience focusing exclusively on employee benefits, including time as a partner in an employee benefits boutique where he has represented clients in front of the DOL and IRS. On the other hand, he holds his FINRA Series 7 and 66 registrations and serves as the Director of ERISA Services for Qualified Plan Advisors.
Matthew likes to stay active. He provides fiduciary training, Investment Policy Statement design, and vendor oversight to our clients. He is an active member of the Employee Benefits Committee of the American Bar Association Tax Section, serving as Chair of the Defined Contribution Plans Subcommittee. He also has been appointed to the IRS TE/GE Gulf States Council and is a frequent speaker on regulatory developments, fiduciary responsibilities, and retirement readiness.
Most importantly, he stays active with his family. His wife, Laura, is the founder of REbeL, Inc., a not-for-profit organization. His three young boys are mixed up in far too many sports, and they enjoy traveling, watching college football, running with Dad, and rooting for the Huskers.
Latest posts by Matt Eickman (see all)
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