The number of Retirement Plan Participants using investment guidance or advice for the participant 401(k) Plans appears to be on the rise since measured in 2014. This is only one of the topics recently addressed in the 2016 Callen Associates Annual Defined Contribution survey. The tenth annual survey, using data from 165 Defined Contribution plans of which 80 percent had over $100 Million in plan assets, reveals a number of trends for plan participants as well as retirement plan fiduciaries.
What is on the Horizon?
Plan sponsors seem to be increasing the oversight of their retirement plan assets and fees. Of specific interest is how fees are paid, how fees are collected and the use of revenue sharing payments of a plan. Many plan sponsors in the survey disclosed they are calculating and monitoring plan related fees on an annual basis. Plan fiduciaries are increasingly utilizing a Statement of Investment Policy to place structure around the plan’s investment process.
The concern for Lawsuits naming the plan sponsor or plan fiduciaries is real and the pending new DOL definition of fiduciary has placed plan sponsors in an uncomfortable “wait and see” mode. The interest in replacing funds that are offered to plan participants is higher than ever – with approximately half of all plan fiduciaries changing their investment lineup during the year.
Confusion for Plan Sponsors
Approximately 35 percent of plan sponsors who are currently using an investment advisor on their retirement plan are unsure of the distinction between a 3(21) fiduciary and a 3(38) fiduciary; while approximately 30% indicated that they would be moving their plan assets from an active management strategy to a strategy which would employ more passive fund management strategy.
