Thoughts of the Week

...of their funds pay revenue sharing, and one third of plans do not know if revenue sharing is disclosed to participants.

— 2012 Defined Contribution Trends Survey, Callan Associates

...intend to reinstate them by year end 2011. Nearly one third had restored the contributions partially or completely, and 75% of those reinstated them at full prior levels.

— Callan Associates, "2011 Defined Contribution Trends Survey: Positioning the DC Plan for the Future", January 2011

...$5 million using a financial adviser, this leaves ample opportunity for skilled retirement plan advisers to help those lagging plans in the areas where they most need help to stay out of trouble.

— PLANSPONSOR Defined Contribution Survey, November 2010

...their 401(k) accounts even when the employer's total contribution doesn't change. In each of three scenarios studied with the same match, the participant contribution increases as the matching formula targets higher contributions. In addition, the analysis shows that stretching the matching contribution to a higher level does not negatively impact participation rates.

— The Principal Financial Group analysis, November 2010

...at year end 2010, up from 81% of workers at year end 2009. When asked what changes they have made, if any, to their 401(k) account due to current economic conditions, 18% reported that they have increased their contributions, compared with 13% in the fourth quarter of 2009.

— Principal Financial Well-Being Index, December 2010

...with the combination of their 401(k) plan and Social Security if the markets perform typically — and if they perform poorly, those same participants could be unable to replace even half (50%) of their pre-retirement income. Only 12% of participants overall are expected to have a median outcome above their ideal goal (70% of pre-retirement income) and at least 50% of their pre-retirement income if market performance is poor.

— Financial Engines, "National 401(k) Evaluation," October 2010

...confessed that they could afford to hike their annual contribution by one percent of their salary. And 59 percent said they could increase their contribution by three percent of their salary, while 32 percent said they could afford a five-percent increase.

— ING Retirement Research Institute study, November 2010

...should not be optional. Seventy-five percent of the large plan sponsors and all consultants support automatic escalation, which would build on the default level of between 3% and 7% for employee salary contributions to auto-enrollment plans. Almost all plan sponsors and consultants report that the ideal DC plan structure would include significant contributions from employers, while 60% of plan sponsors believe employer contributions should vest immediately, instead of waiting until an employee works for one year or more at the company.

— Greenwich Associates, "The Path Forward: Designing the Ideal Defined Contribution Plan," November 2010

... surveyed said they would like the increase to be 1% every year, and 45% would want their contributions to be automatically increased by 2% or more every year. This was especially true among those who earn $75,000 or more in annual household income.

— LIMRA survey, October 2010

...auto plan features will propel the DC market to $5.5 trillion in assets by 2015. The share of passive assets in DC plans will double by 2015 to 25%. By 2015, nearly 70% of assets will be held by individuals at or within five years of their target date for retirement.

— McKinsey & Company, "Winning in the Defined Contribution Market of 2015: New Realities Reshape the Competitive Landscape," September 2010