A Callan survey showed 44% of private and public defined contribution plans expect to replace an investment option for performance-related reasons in 2009, up from 39% who did so last year.
Plan officials also said fund and manager performance and due diligence are their primary focuses for 2009, according to Callan's 2009 Defined Contribution Trends Survey: Impact of Recent Market Volatility on DC Plans.
Target-date funds were used as the default investment option in 59% of plans surveyed, up from 36.4% in 2007 and 32.5% in 2006.
Also, 76% of those surveyed said they'd be increasing the frequency of investment committee meetings in light of market volatility.
There is a real focus by plan sponsors on making sure their "I's are dotted and "T's are crossed in their plans, said Lori Lucas, defined contribution leader at Callan Associates. Given the events toward the end of last year, sponsors are looking to see if plans need to make changes in their due diligence procedures and in their investment funds. Conversely, with all the energy being spent on nuts-and-bolts due diligence, there is going to be a lot less emphasis on plan features in 2009.
The online survey was conducted in late November and early December, and results incorporate responses from 107 companies; 80% of respondents offered 401(k) plans while other respondents provided profit-sharing, 457 and 403(b) plans. The majority of plans had more than $100 million in assets and nearly one-third had assets of $1 billion or more.