PLANADVISER - January/February 2018 - 32

Plan design is another area where micro plans significantly
trail other plans and where advisers can put their
clients on a better path. The Micro Plan Survey indicates
that a mere 20% of these plans automatically
enroll participants, and just 13% use automatic
escalation. The most common deferral
rate for micro plans with auto-enrollment
is 3%, used by 45% of them. This is in line
with plans of all sizes, as the DC Survey
shows that 41% auto-enroll participants at
a 3% deferral rate. Although we have been
hearing about 6% becoming the " new 3% " at
the higher range of the market, the survey
shows there is still much work to be done,
as 3% remains the most common deferral rate for plans in
the $500 million to $1 billion range, used by 36% of plans
of this size.
Micro plans also make employees wait longer to particiMicro
plans
appear to
have ample
room for
improvement.
pate than do larger plans. Micros are the most likely to keep
their company's workers waiting two years or more to be
eligible, true at 62% of these plans. Conversely,
among plans of all sizes, the most common
practice is to let workers dive right into retirement
saving immediately upon hire, cited by
an average 36% of sponsors-and this spikes
up dramatically to 80% among plans in the
$500 million to $1 billion range and 84% of
plans with more than $1 billion of assets.
Like most retirement plans, on average,
micros appear to have ample room for
improvement, with an average participation
rate of 77%, only slightly below the 79% rate among plans
of all sizes, and an average balance of $78,546, trailing the
$97,903 average for the broad sweep of plans. -Lee Barney
2018 PLANADVISER Micro Plan Survey
Use of Advisers
Methodology
The data that follow summarize select results from micro plan-
defined as having less than $5 million in plan assets-respondents
to the 2017 PLANSPONSOR Defined Contribution (DC) Survey. The
survey was fielded from mid-September through early November
2017 and gathered more than 4,000 responses from plans of
all sizes; 36% of responses were from DC plans with less than
$5 million in assets. Insights from the survey are meant to support
existing plan governance processes and do not represent advice/
guidance related to any aspect of plan design. Additional data
can be segmented by plan size, industry, geography and custom
specifications. Please contact Brian O'Keefe at brian.okeefe@
strategic-i.com for information and pricing.
Type(s) of DC Plan(s) Offered
All Micro <$1mm $1mm-$5mm
Common Adviser Services
401(k)
403(b)
457
Money purchase
Profit sharing
ESOP1
Nonqualified deferred compensation
SEP2
SIMPLE IRA3
Other
1Employee stock ownership plan. 2
92% 89% 93%
5% 7%
4% 4%
1%
1%
4%
3%
1%
18% 16% 19%
1% 0%
1%
1%
0% 1%
1%
1%
2% 2%
Simplified employee pension.
3Savings incentive match plan for employees individual retirement plan.
1%
2%
0%
1%
3%
All Micro <$1mm $1mm-$5mm
Review of fund performance
Plan investment selection guidance
Evaluating/Explaining provider fees
Group participant education
One-on-one participant education
Provider selection/due diligence
Benchmarking plan design
Plan compliance with laws and IPS4
Creation/Monitoring of IPS
4Investment policy statement.
91% 87% 92%
87% 87% 87%
71% 63% 73%
70% 71% 69%
69% 71% 69%
61% 60% 61%
54% 48% 55%
52% 45% 54%
52% 44% 53%
Adviser Use Among Plans
All Micro
<$1mm
$1mm-$5mm
All Micro <$1mm $1mm-$5mm
l Yes
l No
69% 62% 72%
31% 38% 28%
32 | planadviser.com january-february 2018
http://www.planadviser.com
PLANADVISER - January/February 2018

Table of Contents for the Digital Edition of PLANADVISER - January/February 2018
