Nearly two-thirds (63.8%) of plan sponsors have changed the investment lineup in their 401(k) plan in the past year, up markedly from a mere 20% in 2008, according to the Profit Sharing/401(k) Council of America.
PSCA’s just-released survey shows that companies are restoring plan contributions that were suspended or reduced since the beginning of 2008; in fact, many companies are increasing and adding new contributions to the plan.
Half of plans that suspended their matching contribution in the last four years have fully restored it. Of all plans reported, 66.7% have maintained their matching contribution, 12.1% of plans increased their match or added a matching contribution, 7.3% have fully restored suspended or reduced matches and 13.9% still have suspended or reduced matching contributions.
While the trend of restoring and adding contributions continues, companies are focused on plan investments during this tumultuous economic period. Sixty three percent of plans changed their investment lineup in the last year, and 56.2% changed their investments in 2010. Only 19.7% did so in 2009.
“This is dramatic. I have not seen anything like this in 25 years of working with plan sponsors,” says David Wray, PSCA president. “That so many plans sponsors are reviewing and reworking their investment lineups demonstrates the importance they see in delivering the very best investment opportunity as part of the 401(k) plan benefit for their employees, especially in these unusual times.”
Other key findings include:
- Of the 14% of plans that suspended the match in the last four years, half have fully restored it.
- Of the 11% of plans that suspended the non-matching contribution, 40% have fully restored it.
- Almost 40% of plans reported an increase in plan participation, up from just 3.9% in 2009.
- Eight percent of plans reported that they added an automatic enrollment feature to their plan in the last year.
