Health-care employers are offering more investment options in their defined contribution plans, according to a survey by the American Hospital Association and Diversified Investment Advisors. In a survey of 39 hospital administrators, 37% said their plans offer more than 20 funds, compared with 26% one year ago and 30% two years ago. About 50% said they would like to add asset allocation, equity growth, balanced and stable value funds within the next plan year.
"Many plan sponsors are augmenting their fund array with additional funds from various families," said David Ray, the not-for-profit practice leader at DIA. "As a result, we see a connection between the increase in the number of investment options and increased investment flexibility."
Roughly 24% of hospitals have automatic enrollment upon eligibility, and 9% offer automatic deferral rate increases.
Hybrid plans, such as cash balance plans, grew 11% over the previous year in a shift primarily away from traditional defined benefit plans.
Hospitals with at least one active defined contribution plan during 2005 were surveyed from June 30 to Aug. 4.