PLANSPONSOR - October/November 2021 - 26

RESEARCH | 2021 PLANSPONSOR DC PLAN BENCHMARKING SURVEY
that a client competes in, " Peluse continues. " When you're
competing with other employers for a talent pool, you want to
make sure you have best-in-class benefits. And when you know
where you are compared with other employers, then you can
think about what you want to do to stand out with your plan. "
Analyzing the Data
When analyzing benchmarking data, Peluse suggests that
sponsors start by reaffirming their goals for having a retirement
plan. " Then we back into, what are the factors, for their
employee demographics, that will make the biggest difference
in achieving those? " he says. " There's a lot of benchmarking
data out there, so we shrink it down to the components most
likely to move the needle for that employee group. "
This often means focusing on benchmarking data for four
or five key plan design features that would have the biggest
impact on that plan's goals if the features changed, he says. The
match usually tops that list, he adds, often followed by the automatic
enrollment default deferral rate and automatic escalation
features. Other frequently used key factors include vesting and
eligibility rules.
" 'Is this feature getting
more people to be able
to replace enough of their
income in retirement?' "
In thinking about design changes after reviewing benchmarking
data, Peluse says, budget realities often come into play.
" So we always put the cost discussion first and foremost, " he
notes. " We'll ask the employer, 'Where are you at today, in terms
of what you're willing to spend on your retirement program?' If
the employer is going to consider giving every participant a 6%
match, for example, we need to be cognizant of what the cost
will be if the plan gets a 95% participation rate. "
To help sponsors understand the implications, Wintrust
will utilize software to run an analysis of the impact of
design changes being considered. For instance, an analysis
of changing the default deferral rate will project the impact
of different options for the deferral percentage on that plan's
participation rate, as well as projecting the impact of each
option on the employer's match costs.
" Often an employer will say, 'Hey, we can't do all of this
today, but let's do one or two things now, and we'll use benchmarking
data to move us incrementally toward the ultimate
solution,' " Peluse says. " We always tell employers, 'Let's do this
intelligently, so we get the best results we can for the money
you have to spend.' " -Judy Ward
26 PLANSPONSOR.COM October - November 2021
45%
<$10mm
$10mm -
$50mm
>$50mm -
$200mm
Average Asset-Weighted Expense Ratio of
All Investment Options
l <$10mm l $10mm - $50mm l >$50mm - $200mm l >$200mm
48%
43%
39%
35%
28%
31%
25%
27%
14%
<25 basis points
25-50 basis points
>50 basis points
38%
37 37%%
>$200mm
24%
<$10mm
Plan Sizes
It has long been known that plan size correlates to differences
in plan design, with larger plans-i.e., those with $200 million
or more in plan assets-adopting more progressive features long
before their smaller counterparts. Larger plans were among the
first to adopt automatic enrollment and remain twice as likely to
offer the feature today. They also come with a size and scale that
can lead to higher levels of plan oversight and lower investment
fees. Collectively, plan size may be the most important yardstick
by which to benchmark your retirement plan.
Automatic Enrollment Offered
86%
67%
53%
$10mm -
$50mm
>$50mm -
$200mm
Investment Committee for DC Plan
97%
84%
98%
>$200mm
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