Nevin's Data "Points"

A month ago, when we wrote about the 61 st  Annual Survey of Profit Sharing and 401(k) Plans from the Plan Sponsor Council of America (PSCA), there were several key points highlighted – but there are some interesting findings you might have overlooked. Perhaps the most significant finding of that survey – the longest running of its kind – was a record employer contribution rate (5.1% of pay) and a total savings rate in excess of 12%, the highest percentage ever recorded in the history of the survey. Also noteworthy was that nearly three-fourths (73.1%) of plans now retain an independent investment advisor to assist with fiduciary responsibilities – up from 69.5% in 2016. But here are some findings from the survey of plan sponsors that you might have missed. There’s less ‘waiting.’ Once upon a time, the norm was to have participants wait a year before letting them participate in the 401(k) plan. There was administrative logic in that decision – after all, tur...

Target-date funds continue to expand in usage and popularity – but there are some things the Labor Department wants you to know about TDFs that you may have overlooked. When the Labor Department published its “ Target Date Retirement Funds – Tips for ERISA Plan Fiduciaries ” in 2013, I was pleased to see it, and to discover that it could be read 1 (and understood) in about 15 minutes. But in preparation for a recent webcast on the topic, I took a fresh look at that document, and found some nuggets that I hadn’t really picked up on the first time around. It’s Not Just About Fees and Performance As part of a reminder about the importance of establishing a process for comparing and selecting TDFs, the Labor Department specifically references considering prospectus information, such as information about performance (investment returns) as well as investment fees and expenses. However, in that same topic point, the agency says that plan fiduciaries should consider how well the TD...