2017 DC SURVEY: PLAN BENCHMARKING
Art by Red Nose Studio
Putting plan metrics into perspective
When examining plan design, there are two sets of considerations for plan spon- sors. There are the plan design elements and decisions that govern how the plan will work for plan participants, and there are the fiduciary elements and
decisions for which plan sponsors and other fiduciaries carry a significant responsibility.
Both sets are important in determining the success of a retirement plan, but in
different ways. Results of the 2017 PLANSPONSOR DC Survey: Plan Benchmarking indicate that some best practices in plan governance have stalled, and plan design decisions
appear to balance both impact and cost.
According to survey findings, adoption of some perceived best practices in plan governance that are often cited as means to protect plan fiduciaries have leveled off. This may
seem surprising to those who have seen the increase in litigation against plan sponsors.
Why would fiduciary best practices decline if plan sponsors are aware of the litigation and
interested in protecting themselves?
One recognized best practice, the existence and use of investment committees, is
trending down. Based on survey responses, nearly every defined contribution plan with
more than $50 million in assets has an investment committee. By contrast, 16.6% of the
$5 million to -$25 million segment do not have investment committees. With retirement
plan menus becoming more complex, and with the increased use of alternatives and overlays, an investment committee broadens the bandwidth of a plan sponsor and helps it stay
up to date on investment news.