LAKE WORTH, Fla. - Pension plan executives at companies with smaller 401(k) plans are more satisfied with their service providers than firms with more plan assets, according to two independent surveys.
A survey by Insight In Formation, Lake Worth, Fla., found just less than 5% of the 2,420 plan sponsors with over $50 million in plan assets polled are searching for or in the process of changing their fund managers. By comparison, only 3.13% of companies with 401(k) plans containing less than $5 million in assets are searching for managers or are in the process of changing fund managers. Close to 4% of executives at midsized plans of between $5 million and $100 million in assets were in the process of searching or changing service providers.
"The number of companies searching or changing fund managers is two percentage points higher in the larger market than in the small market. That was sort of striking to me," said Fred D. Barstein, managing director of Insight In Formation. "The over $50 million is a tougher and tougher market with fewer and fewer companies that service it. There is less choice because larger plans have more needs, more education requirements and more choices, and it's harder for companies to service them."
These results were confirmed by the DC/401(k) Benchmark Survey of The Society of Plan Sponsors' 150 members with defined contribution plans. The new organization's first defined contribution poll indicated 75% of companies with less than 500 employees and an average of $19.3 million in defined contribution plan assets have retained their current investment provider for more than five years, explained Frank Bermani, executive director of the Simsbury, Conn., organization. However, only 52% of employers with more than 500 employees and an average of $252 million in plan assets have been with their current provider for more than five years.
