Defined Contribution Plan Benchmarking

The Plan Sponsor Council of America’s 64th Annual Survey of Profit Sharing and 401(k) Plans¹ reports on the 2020 plan-year experience of more than 500 defined contribution plans. Leading industries represented in the survey include: Financial (22.8%), Manufacturing (11.6%), Services (8.7%), Healthcare (6.2%), Construction (4.2%), and Utilities (3.9%).

Key Highlights:

Investment options: The average number of investment options offered increased for the first time in more than a decade, to 21 funds. Options were highest among plans with 50–199 participants and lowest among plans with 5,000+ participants.

Target Date Funds: Eighty-three percent of plans offer target date funds, an increase of 20% in 5 years, with an average of 23.7% of plan assets invested in them. Of plans that offer target date funds, most offer actively managed (rather than passive or index-based) funds.

Investment policy: Most plans have an Investment Policy Statement (85%). They are less common among smaller plans.

Requests for Proposals: Twenty percent of organizations have put out a request for proposal (RFP) or information (RFI) within the last 2 years, and nearly 30% did so 2–3 years ago. Leading reasons organizations put out an RFP/RFI: to benchmark fees (64.7% of all plans) and length of time since last RFP (65.5% of all plans).

Recordkeeping expenses: Forty-five percent of plans are charged a basis point fee (% of assets) for recordkeeping and administration; 21% of plans pay a flat rate per participant. Smaller plans are more likely to be charged a percentage of assets fee, whereas larger plans tend to pay a flat rate per participant.

For an in-depth look:

Defined Contribution Plan Benchmarking

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Important Legal Disclosures and Information

1 All data was obtained from the Plan Sponsor Council of America's 64th Annual Survey of Profit Sharing and 401(k) Plans (Reflecting 2020 Plan Experience) (2021).

The material presented herein is of a general nature and does not constitute the provision by PNC of investment, legal, tax, or accounting advice to any person, or a recommendation to buy or sell any security or adopt any investment strategy. Opinions expressed herein are subject to change without notice. The information was obtained from sources deemed reliable. Such information is not guaranteed as to its accuracy.

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