Annual 401(K) Benchmarking Survey

Plan sponsors and providers work at closing the retirement readiness gap while getting ready for new fee disclosure regulations


The unfolding decade raises questions on the effectiveness of the 401 (k) plan which is viewed as the primary saving vehicle for millions across USA. However, with the decreasing popularity of employer-sponsored defined benefit pension plans and increasing concerns about the future of Social Security a need to stretch the 401(k) plan is felt both by the employees and retirees. Additionally, the rise in cost of healthcare combined with high level of personal debt, unemployment and low level of personal savings projects a disturbing picture of retirement readiness. The employees are facing confusion on contribution amount, contribution time (pre or post tax), where to invest or should investment be done at all given the ongoing economic fluctuations, the amount to save for a secure retirement and the corresponding cost.

The 2011 Deloitte 401(k) Benchmarking Survey is a snapshot into the priorities and associated actions of plan sponsors. Participated by 430 plan sponsors, the survey gathered responses from plan sponsors representing a cross-section of organizations in terms of size, industry, geography, and ownership status. It offers a broad view of the priorities, policies, features, objectives and expectations of the diverse population of respondents. Key findings indicate:

  • Only 15 percent of plan sponsors believe most employees will be prepared for retirement
  • With the approaching effective date of fee disclosure regulations [404(a) and 408(b)(2)] 83 percent of plan sponsors believe their 401(k) fees are competitive
  • 56 percent of plans now include an automatic enrollment feature (up 7 percent from 2010)
  • One in five plans with automatic enrollment now has a default deferral rate of 5 percent or more
  • 47 percent of all plans now include a ROTH feature. However, 86 percent of plans report that less than 10 percent of participants are taking advantage
  • The average plan now includes 18 investment funds (a pause in the growth from prior years)
  • Only 5 percent of plan sponsors have added either an in-plan (accumulation annuity) or at-retirement income solution (annuity purchase option) to their plan

This comprehensive survey was conducted jointly by Deloitte Consulting LLP, the International Foundation of Employee Benefit Plans and the International Society of Certified Employee Benefit Specialists.