Tools like managed accounts and target-date funds continue to gain ground, and more than one-third of companies now offer investment advice to participants, more findings from PSCA’s 61st Annual Survey reveal.
There are several ways that companies provide investment support to participants—through the availability of managed accounts, target-date funds, automatic features/QDIAs, and personalized investment advice from professionals.
- The percentage of plans offering professionally managed investments continues to rise, now in almost 40 percent of plans.
- The percentage of plans offering target-date funds has increased from 57.7 percent to 70.6 percent, a 22 percent increase during the past ten years—and participants are taking advantage of this option. The percentage of assets invested in target-date investments has also increased during this time—from 8.4 percent to 22.6 percent, a 163 percent increase.
- The percentage of plans with investment advice for participants is also rising steadily. Where provided, participants may have a choice among a telephone hotline, an internet provider, web conference and one-on-one counseling. One-on-one counseling is the most common method, now offered by almost 70 percent of the plans that provide advice.
“Companies that offer investment support can help participants make better decisions for their financial future,” Hattie Greenan, Director of Research for PSCA, said in a statement. “One-on-one counseling is a personalized method of advice delivery that can incorporate a comprehensive discussion on financial wellness.”
The survey
The 61st Annual Survey of Profit Sharing and 401(k) Plans, the longest-running survey of its kind, also covers topics such as monitoring investment policy statements, alternative investment options, company stock, distribution and withdrawals, participant education and communication, recordkeeping, and other plan administration practices.
The report includes a comprehensive executive summary that examines the 10-year trends of key plan benchmarking data points.