Introduction to PSCA s 58th Annual Survey... 1 Respondent Demographics... 2 Table 1 Respondents by plan size and plan type... 2 Table 2 Respondents by total plan assets and plan type... 4 Table 3 Respondents by industry and plan size... 5 Table 4 Other types of plans offered to essentially the same group of employees as the plan reported... 6 Table 5 Type of defined benefit plan offered by companies offering defined benefit plans to essentially the same group of employees as the plan reported... 6 Table 6 Percentage of plans that made changes to their 401(k)/profit sharing plan as a result of changes to the DB plan... 6 Employee Eligibility... 7 Table 7 Employees eligible to participate in plans as a percentage of companies total U.S. employees... 7 Table 8 Employees eligible to participate in plans as a percentage of companies total U.S. employees by industry... 8 Table 9 Union worker eligibility by plan size... 8 Table 10 Employee groups eligible to participate in the plan for companies that have those types of employees... 9 Table 11 Service requirements for employees to be eligible to make contributions to the plan by plan size... 9 Table 12 Service requirements for eligibility to receive matching company contributions (when matching contributions are made) by company size... 9 Table 13 Service requirements for eligibility to receive non-matching company contributions (when non-matching contributions are made) by company size... 10 Table 14 Plans that require participants to be employed on the last day of the plan year to receive the company contribution by plan size... 10 Table 15 Minimum age requirements for eligibility by plan size... 10 Participant Contributions... 11 Table 16 Plans permitting participant contributions by tax basis and plan size... 12 Table 17 Percentage of eligible employees with an account balance... 12 Table 18 Percentage of eligible employees with an account balance by industry and plan type... 13 Table 19 Percentage of eligible employees that made contributions to the plan in 2014, when permitted, by plan size... 13 Table 20 Percentage of eligible employees that made contributions to the plan in 2014, when permitted, by industry... 14 Table 21 Percentage of eligible employees that made contributions to the plan in 2014, when permitted, by company matching formula... 14 Table 22 Average percentage of terminated vested employees with a plan balance (as a percentage of total participants)... 15 Table 23 Average years of participation by participants who retired during the last plan year... 15 Table 24 Average years of participation by participants who retired during the last plan year, 1991 2014... 16 Table 25 Average percentage of salary deferral for ADP test results... 17 Table 26 Average percentage of pre-tax salary deferral among non-highly compensated participants, 1991 2014... 18 Table 27 Average percentage of salary deferred (pre- and after-tax) for all active participants... 19 Table 28 Average percentage of salary deferred (pre- and after-tax) for all active participants by industry... 19 Table 29 Percentage of plans that provide a suggested savings rate to participants... 20 Table 30 Savings rate suggested to participants (as a percentage of pay)... 20 Table 31 Average account balance for active and terminated vested participants... 20 Table 32 Percentage of plans permitting Roth 401(k) deferrals... 21 Table 33 Percentage of contributing participants who made Roth 401(k) contributions (when Roth is offered)... 21 Table 34 Percentage of plans permitting catch-up contributions to participants age 50 and older... 22 Table 35 Percentage of plans matching catch-up contributions (when catch-ups are permitted)... 22 iv
Table 36 Percentage of participants age 50 and older who made catch-up contributions (when permitted)... 22 Table 37 Percentage of plans accepting rollovers from other plans... 23 Table 38 Permitted rollover sources... 23 Table 39 Point at which plans accept rollovers (for plans permitting elective employee deferrals)... 23 Table 40 Average and median Section 415 percentage limits... 24 Company Contributions... 25 Table 41 Company contributions as a percentage of eligible participants total annual payroll by plan type and plan year... 25 Table 42 Company contributions as a percentage of eligible participants total annual payroll by plan type and plan size... 26 Table 43 Company contributions as a percentage of eligible participants total annual payroll by plan type and industry... 26 Table 44 Company contributions as a percentage of eligible participants total annual payroll by type of contribution... 27 Table 45 Company contributions as a percentage of total net profit by plan type and plan size... 27 Table 46 Plan design methods used to determine company contributions for 401(k) and combination plans... 28 Table 47 Percentage of companies that made contributions in 2014 when provided for in the plan by types of contributions offered and plan size... 29 Table 48 Type of matching formula used by plans with company matches... 30 Table 49 Matching formulas used in plans with fixed and discretionary matches... 31 Table 50 Matching formulas used in plans with fixed and discretionary matches by industry type... 32 Table 51 Average matching contribution and percentage of pay matched by industry type... 33 Table 52 Average maximum company contributions allowed by the plan, by type of contribution, when offered... 33 Table 53 Type of safe harbor plan design used in plans with a safe harbor match by size... 34 Table 54 Definition of compensation by plan size... 35 Table 55 Frequency of non-matching company contributions... 36 Table 56 Frequency of matching company contributions... 37 Table 57 Percentage of companies making true-up matches (for plans in which matches are not made annually) to ensure all participants receive the full match... 38 Table 58 Vesting schedules by plan size and contribution type... 38 Asset Investment... 39 Table 59 Percentage of plans that have the same fund options available for participant and company contributions for plans that offer both... 39 Table 60 Number of investment funds available for company contributions by plan size... 39 Table 61 Number of investment funds available for participant contributions by plan size... 40 Table 62 Average number of investment fund options by plan size... 40 Table 63 Average number of investment fund options by year, 2003 2014... 41 Table 64 Investment funds available in the plan by plan size... 42 Table 65 Average number of funds offered by asset class and plan size for all plans... 43 Table 66 Average number of funds offered by asset class and plan size for only those plans that offer the specified asset class... 43 Table 67 Investment structure by fund type and structure in plans with fewer than 4,999 participants... 44 Table 68 Investment structure by fund type and structure in plans with 5,000 or more participants... 45 Table 69 Investment structure by fund type and structure for all plans... 46 Table 70 Percentage of the 785 billion in total plan assets invested by fund type and plan size... 47 Table 71 Average allocation of assets in plans... 48 Table 72 Type of target-date fund used by companies offering them... 49 Table 73 Type of glide-path used in plans offering target-date funds... 49 Table 74 Management of target-date funds, for plans that offer them... 49 Table 75 Percentage of plans offering a professionally managed alternative... 49 Table 76 Parties paying for professionally managed alternative, if offered... 50 v
Table 77 Types of participants who pay for professionally managed alternative, if professionally managed alternative is offered and if participants pay... 50 Table 78 Percentage of plans offering a professionally managed alternative in which the manager is limited to the funds available for participant direction... 50 Table 79 Percentage of plans offering a lifetime income option to participants... 50 Table 80 Percentage of plans using a Qualified Default Investment Alternative (QDIA)... 51 Table 81 Qualified Default Investment Alternative (QDIA) used... 51 Investment Allocation and Monitoring... 52 Table 82 Parties determining how contributions are distributed to investment funds... 53 Table 83 Parties determining how contributions are distributed to investment funds in plans with fewer than 50 participants... 53 Table 84 Frequency with which participants may initiate fund transfers... 53 Table 85 Percentage of plans in which fund transfers are limited... 54 Table 86 Factors that limit fund transfers... 54 Table 87 Frequency participant accounts are valued... 54 Table 88 Percentage of plans restricted to investment options managed by their recordkeeper... 55 Table 89 Primary plan recordkeeper by plan size... 55 Table 90 Method of trusteeship by plan size... 56 Table 91 Percentage of plans reporting having an investment policy statement... 57 Table 92 Percentage of plans that have an investment policy statement, 2005 2014... 58 Table 93 Investment monitoring frequency... 58 Table 94 Percentage of plans that retain an independent investment advisor to assist with fiduciary responsibility (separate from recordkeeper)... 59 Table 95 Payment of the independent investment advisor for those companies that retain one... 59 Company Stock... 60 Table 96 Percentage of companies that offer company stock as an investment option by plan size... 60 Table 97 Average and median percentages of total plan assets invested in company stock for plans that offer company stock funds by plan type... 61 Table 98 Average and median percentages of total plan assets invested in company stock for plans that offer company stock funds by plan size... 61 Table 99 Percentage of total plan assets invested in company stock for plans that offer company stock funds, 2005 2014... 61 Table 100 Percentage of plans that limit the amount of assets that can be invested in company stock... 62 Table 101 Percentage of plans with company stock that make contributions in company stock by plan type... 62 Table 102 Percentage of plans with company stock and matching company contributions that make matching contributions in company stock by plan size... 62 Table 103 Percentage of plans taking a dividend deduction, when company stock is offered... 62 Investment Advice... 63 Table 104 Percentage of plans offering investment advice... 63 Table 105 Provider of investment advice, when offered... 63 Table 106 Method investment advice is delivered to participants, for plans offering investment advice... 64 Table 107 Average percentage of participants who utilize investment advice when advice is offered... 64 Table 108 Payer of investment advice by plan size... 65 Table 109 Types of participants who pay for investment advice, when investment advice is offered and participants pay... 65 Table 110 Percentage of plans in which the investment advisor is limited to funds available for participant direction... 65 vi
Automatic Features... 66 Table 111 Percentage of plans with automatic enrollment by plan size... 66 Table 112 Types of employees automatic enrollment is used with by plan size... 66 Table 113 Percentage of plans with automatic enrollment by industry type... 67 Table 114 Reasons companies do not use automatic enrollment by plan size... 67 Table 115 Default deferral percentage in plans with automatic enrollment, by plan size... 68 Table 116 Default investment option for automatic deferrals, by plan size... 68 Table 117 Average percentage of participants contributing to the plan in plans that use an automatic enrollment feature... 68 Table 118 Average deferral rate in plans that use an automatic enrollment feature... 69 Table 119 Average percentage of automatically enrolled participants that opted-out of the plan in 2014... 69 Table 120 Percentage of automatic enrollment plans that automatically increase default deferral rates over time, by plan size... 69 Table 121 Percentage of all plans that automatically increase default deferral rates over time, by plan size... 70 Table 122 Amount default deferral is increased every year for all plans... 70 Table 123 Basis for automatically increasing default deferral rates over time... 70 Table 124 Cap on automatic increases for plans that automatically increase deferrals over time by plan size... 71 Table 125 Percentage of plans that allow participants to automatically rebalance their portfolios... 71 Loans... 72 Table 126 Plans permitting participant loans by plan type and plan size... 72 Table 127 Percentage of plans permitting loans by industry type... 74 Table 128 Formula used for calculating loan interest rates... 74 Table 129 Average and median loan interest rate... 75 Table 130 Number of loans allowed in plans permitting loans... 75 Table 131 Minimum loan amount requirements... 75 Table 132 Types of loan fees charged to participants... 76 Table 133 Average and median loan fees charged to borrowers... 76 Table 134 Plan loan usage comparison, 2003 2014 for plans permitting loans... 77 Distributions and Withdrawals... 78 Table 135 Percentage of plans permitting hardship withdrawals... 78 Table 136 Percentage of plans permitting hardship withdrawals by industry type... 79 Table 137 Reasons for permitting hardship withdrawals... 79 Table 138 Average percentage of participants taking a hardship withdrawal, when permitted... 80 Table 139 Processing of hardship withdrawals... 80 Table 140 Types of fees charged for hardship withdrawals... 80 Table 141 Average and median transaction fees charged for hardship withdrawals... 81 Table 142 Percentage of plans permitting in-service distributions (excluding hardship withdrawals)... 81 Table 143 Types of fees charged for in-service (non-hardship) distribution... 81 Table 144 Average and median transaction fees charged for in-service (non-hardship) distributions... 82 Table 145 Age at which in-service distributions (non-hardship) are permitted... 82 Table 146 Pre-retirement distribution options offered... 83 Table 147 Policies used for participants who terminate prior to retirement... 83 Table 148 Retirement distribution options offered... 83 Table 149 Types of fees charged for retirement distributions... 84 Table 150 Average and median transaction fees charged for retirement distributions... 84 Table 151 Percentage of plans providing education to participants taking a distribution beyond the required government forms, by type of distribution... 84 vii
Participant Education and Communication... 85 Table 152 Purposes for providing plan education to employees... 85 Table 153 Primary purpose for providing plan education to employees... 86 Table 154 Provider of retirement planning education, when offered, by plan size... 87 Table 155 Type of education materials used to accomplish educational goals... 87 Table 156 Percentage of plans that have a comprehensive financial wellness program, beyond a standard 401(k) education program... 88 Table 157 Percentage of plans that evaluate the success of their education programs... 88 Table 158 Measurements used to evaluate the success of education programs... 88 Plan Expenses... 89 Table 159 Payer of plan expenses for all plans... 89 Table 160 Payer of plan expenses in plans with 5,000 or more participants... 90 Table 161 Percentage of plans requiring terminated vested participants to pay plan expenses on a different basis than their employed counterparts... 90 Table 162 Methods by which companies receive plan fee information by plan size... 90 Table 163 Information used by the plan sponsor in evaluating plan fees by plan size... 91 Table 164 Types of recordkeeping and administration fees charged, by plan size... 91 Table 165 Investment pricing menu used, by plan size... 91 Table 166 Percentage of plans that use an ERISA bucket (EBA (Expense Budget Account) or PERA (Plan Expense Reimbursement Account)) by plan size... 92 Table 167 Frequency that a formal evaluation of plan fees is conducted by plan size... 92 Plan Administration Practices... 93 Table 168 401(k) average deferral percentage (ADP) non-discrimination test results... 94 Table 169 Percentage of plans that are top heavy... 95 Table 170 Contribution factors other than earnings... 95 Table 171 Percentage of plans that limit entry into the plan to specific times a year (after any eligibility requirements are met)... 95 Table 172 Percentage of companies providing services via sponsor benefits staff... 96 Table 173 Percentage of companies providing services via vendor benefit centers... 96 Table 174 Percentage of companies providing services via the Internet... 97 Table 175 Percentage of companies providing services via mobile technology... 97 Table 176 Forfeiture allocation policies for companies with forfeitures by plan type and plan size... 98 Table 177 Participant behaviors that companies monitor... 99 Table 178 Percentage of companies that took action based on what they learned from monitored participant behaviors... 99 Table 179 Percentage of companies that evaluates whether the plan is successful (meeting the goals for the plan)... 99 Table 180 Types of changes made to the plan in 2014 for companies that made them... 100 Table 181 Percentage of companies that evaluate whether their plan is successful (meeting corporate objectives)... 100 Table 182 Benchmarks used to determine plan success... 100 Survey Questionnaire... 101... 102 Index... 109 viii