36% of 401(k) plans provide 100% company match
BOSTON — The company match provided by 36% of 401(k) plan sponsors is 100%, according to a survey by Mercer Human Resource Consulting. The number of plans offering a 100% match of employee contributions has risen steadily: 26% in 2002, 27% in 2003, 29% in 2004 and 33% in 2005. Companies are offering higher matches as more move from defined benefit plans to defined contribution plans, according to a news release about the survey. Mercer surveyed 1,025 sponsors of 401(k) or 403(b) plans in December.
More plan sponsors considering adding Roth 401(k) features
CHICAGO — More than half of companies that sponsor 401(k) plans will consider adding Roth 401(k) features now that the Pension Protection Act of 2006 has made the Roth provisions permanent, according to a survey of 429 companies released Feb. 21 by the Profit Sharing/401(k) Council of America.
Twenty-two percent of plans offered Roth features as of Feb. 2, and 61.4% of plans that don’t currently offer Roth features are considering it. In addition, 69% of the plans that aren’t offering Roth features said the law had increased the likelihood that they would offer a Roth plan in the future.
According to the survey, about 8% of eligible employees working for the companies that offered Roth accounts made contributions in 2006.
More than half the companies that don’t currently offer Roth 401(k) plans cited lack of participant demand and additional administrative and educational burdens as key reasons.
Participant’s DC contributions to grow by another $100 billion by 2011
NEEDHAM, Mass. — Participant contributions to defined contribution plans will nearly double to $204 billion in 2011 from $103 billion now because of the automatic enrollment and deferral increase provisions of the Pension Protection Act, according to a new report by TowerGroup Research. Without auto enrollment, contributions would have increased only to $109 billion in 2011, the report said.
The report also found that allocations to target-date or lifestyle default options will grow to 56% by 2011, from 11% now. TowerGroup also reported that only 11% of U.S. employees will be covered exclusively by a defined benefit plan by 2011, 76% only by a DC plan and 13% by both.
The data came from separate DB and DC reports conducted by TowerGroup.
DC fund administrator Intercare buys retirement planning firm
ROSEVILLE, Calif. — Intercare Insurance Solutions acquired SFG Benefits Financial, a retirement planning firm, said Intercare spokeswoman Debra Iacunato. Terms were not disclosed.
Bret Dudl, founder and CEO of SFG Benefits Financial, is now vice president of retirement plans for Intercare, a new position. Other SFG staff relocated to Intercare headquarters, and SFG closed. Intercare offers investment services and fund administration for defined contribution plans.
