PLANADVISER - November/December 2017 - 14

plan focus
Proprietary Fund Usage
Highlights of BrightScope's proprietary research
A
n employer has the option to choose its recordkeepers'
proprietary mutual funds, collective investment
trusts (CITs) or separate accounts for the company
plan's investment lineup. A proprietary investment is one
bearing the same name as the recordkeeper or third-party
administrator (TPA). As is true when choosing any fund,
selecting a proprietary fund must be done in the best
interest of the participants and be documented as such.
In 2014, according to data from BrightScope-like
PLANADVISER, a Strategic Insight company-65.4% of 401(k)
plans included proprietary funds in their investment lineup,
and the assets in those funds accounted for 26.1% of all plan
assets. Larger plans were the most likely to offer proprietary
funds, although this tendency was less evident in the largest
plans, which included proprietary funds at about the same
rate as the smallest plans did.
While plans with $250 million to $500 million in plan
assets were significantly more apt to offer proprietary funds
than were the smallest plans, participant investment in
proprietary funds was similar in plans of both sizes. For all
plan-size groups with less than $1 billion in assets, proprietary
funds accounted for 32% through 38% of plan assets.
Participants in plans worth over $1 billion held a lower
share of their assets (18.9%) in proprietary funds. A similar
pattern emerges when the variation across plans by number
of plan participants is analyzed. -PA
Proprietary Fund Use Varies by Plan Size
Plan assets invested in proprietary funds and the percentage of plans offering proprietary funds*, ...
... By asset size
n % of plan assets n % of plans
65.4
34.6
26.1
All plans
$1mm - $10mm
>$10mm -
$50mm
... By number of participants
n % of plan assets n % of plans
65.4
36.2
26.1
All plans
<100
100 - 499
500 - 999
1,000 - 4,999
62.1
35.4
65.3
39.0
72.3
63.0
34.6
27.9
19.1
5,000 - 9,999
>10,000
*Proprietary funds are the investment products of the recordkeeping financial services firm. Funds include mutual funds, collective
investment trusts, separate accounts and other pooled investment products.
Note: The sample set is 26,167 plans with a combined $2.9 trillion in assets. The audited 401(k) filings generally include plans with 100
participants or more. Plans with fewer than four investment options, more than 100 investment options or less than $1 million in plan
assets are excluded from the audited 401(k) filings.
Source: BrightScope Defined Contribution Plan Database
73.3
70.6
>$50mm -
$100mm
>$100mm -
$250mm
>$250mm -
$500mm
68.5
59.1
35.9
37.7
36.0
36.3
32.8
18.9
>$500mm -
$1b
>$1b
74.6
75.0
76.3
73.3
60.6
14 | planadviser.com november-december 2017

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PLANADVISER - November/December 2017

Table of Contents for the Digital Edition of PLANADVISER - November/December 2017

The Next Step
2017 PLANADVISER National Conference
2017 Practice Benchmarking Survey
Aggressive Plan Design
Professional Groups
The Value of Fixed Income
PLANADVISER - November/December 2017 - C1
PLANADVISER - November/December 2017 - FC1
PLANADVISER - November/December 2017 - FC2
PLANADVISER - November/December 2017 - C2
PLANADVISER - November/December 2017 - 1
PLANADVISER - November/December 2017 - 2
PLANADVISER - November/December 2017 - 3
PLANADVISER - November/December 2017 - 4
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PLANADVISER - November/December 2017 - 27
PLANADVISER - November/December 2017 - 28
PLANADVISER - November/December 2017 - 29
PLANADVISER - November/December 2017 - The Next Step
PLANADVISER - November/December 2017 - 31
PLANADVISER - November/December 2017 - 32
PLANADVISER - November/December 2017 - 33
PLANADVISER - November/December 2017 - 2017 PLANADVISER National Conference
PLANADVISER - November/December 2017 - 35
PLANADVISER - November/December 2017 - 36
PLANADVISER - November/December 2017 - 37
PLANADVISER - November/December 2017 - 38
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PLANADVISER - November/December 2017 - 40
PLANADVISER - November/December 2017 - 41
PLANADVISER - November/December 2017 - 42
PLANADVISER - November/December 2017 - 43
PLANADVISER - November/December 2017 - 44
PLANADVISER - November/December 2017 - 45
PLANADVISER - November/December 2017 - 2017 Practice Benchmarking Survey
PLANADVISER - November/December 2017 - 47
PLANADVISER - November/December 2017 - 48
PLANADVISER - November/December 2017 - 49
PLANADVISER - November/December 2017 - 50
PLANADVISER - November/December 2017 - 51
PLANADVISER - November/December 2017 - 52
PLANADVISER - November/December 2017 - 53
PLANADVISER - November/December 2017 - Aggressive Plan Design
PLANADVISER - November/December 2017 - 55
PLANADVISER - November/December 2017 - 56
PLANADVISER - November/December 2017 - Professional Groups
PLANADVISER - November/December 2017 - 58
PLANADVISER - November/December 2017 - 59
PLANADVISER - November/December 2017 - The Value of Fixed Income
PLANADVISER - November/December 2017 - 61
PLANADVISER - November/December 2017 - 62
PLANADVISER - November/December 2017 - 63
PLANADVISER - November/December 2017 - 64
PLANADVISER - November/December 2017 - C3
PLANADVISER - November/December 2017 - C4
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