NAPA Net - Polling Places 011020

Have Some Plan Designs Plateaued?

A recent survey by the Plan Sponsor Council of America suggests that some plan design feature adoption rates may have plateaued. What’s been your experience?

PSCA’s 62nd Annual Survey of Profit Sharing and 401(k) Plans, reporting 2018 plan activity, found that while nearly a quarter of participants (23%) elected to contribute to a Roth when given the opportunity (a 30% increase in three years), and while nearly 70% of plans now provide a Roth 401(k) option – the number of plans offering a Roth option has plateaued, from 69.6% a year ago to 69.1% in this year’s survey.

Similarly, and while the number of plans using a default deferral rate of 6% of pay (rather than the traditional 3%) increased from 23.8% in 2017 to 29.7% in 2018, the number of plans with automatic enrollment has actually slipped – from 61.2% in last year’s survey to 60.2% in 2018.

And while more than two-thirds (68.6%) offer target-date funds in their plan, that is down five percent in just two year’s time.

Now, those are fairly recent readings, and it may be to early to label a short-term leveling of adoption rates with a long-term trend. Still, it seemed a good time to ask if you’ve seen similar reactions among the plans and prospects with which you’re working (or hoping to work).

Question Title

* 1. What trend(s) have you seen in automatic enrollment with the plans you work with, or are trying to work with over the past three years?

Seems as though everybody who plans to implement automatic enrollment already has.

There's still a lot of interest in automatic enrollment.

The trend has slowed, but hasn't plateaued.

My clients have all adopted automatic enrollment - how's THAT for a trend?

Any comment(s) on the trend(s) - or lack thereof?

Question Title

* 2. What trend(s) have you seen regarding the default deferral rate among automatic enrollment plans you work with, or are trying to work with, over the past three years?

3% is still the standard for most.

3% is still the standard, but we're starting to talk about increasing it.

It's been above 3% for awhile now.

6% is the new 3%!

Any comments on the trend(s) with this (or lack thereof)?

Question Title

* 3. What trend(s) have you seen regarding Roth 401(k) adoption in the plans you work with, or are trying to work with, over the past three years?

Seems as though everybody who plans to implement a Roth option already has.

There's still a lot of interest in Roth.

The trend has slowed, but hasn't plateaued.

My clients have all adopted a Roth 401(k) option - how's THAT for a trend?

Any comment(s) on these trend(s) (or lack thereof)?

Question Title

* 4. What's going to top your list of topics for Q1 meetings with plan sponsors/committees (you can check more than one)?

SECURE Act implications

The markets.

Investment review

Litigation trends

Service metrics

Preparations for RPF

Education plan.

Service contract provisions.

Something else?

Question Title

* 5. Other comments about plan designs, plan design trends, the leveling of plan design trends, the implications of leveling of plan design trends, the illusion of plan design trends leveling, or life in general?

Question Title

* 6. What is your role working with retirement plans?

Advisor

Provider

TPA

Plan sponsor

Recordkeeper

Other (please specify)

Question Title

* 7. What size plans do you PRIMARILY work with?

Under $10 million in assets

$10-$20 million

$20-$50 million

$50-100 million

$100 million - $250 million

$250 million - $500 million

Above $500 million

Other (please specify)

Question Title

* 8. Suggestions for future survey questions?

Question Title

* 9. All responses are anonymous and confidential, of course - but if you'd like me to know who you are, or allow for a response, you can leave your email below...