What factors are most important to the success of defined contribution plan participants? Putnam Investments' latest iteration of its "Missing the Forest for the Trees" white paper found that deferral rates have a greater impact on a portfolio than fund selection, asset allocation or rebalancing.

Putnam established a base case on which to base its conclusions. They assumed that a 28-year-old in 1982 earned $25,000 per year with a 3 percent cost-of-living increase. The worker contributes 3 percent of gross salary to a 401(k) plan that receives a 50-cent match on the dollar up to 6 percent and has a conservative asset allocation across six asset classes. The hypothetical 401(k) also invests in funds in the bottom 25 percent of their Lipper peer group. By the time the worker turns 57 in 2011, income is $57,198, and the 401(k) balance is $136,400.

To determine which factors were the biggest wealth drivers, Putnam first changed the funds used in four hypothetical situations: the fourth-quartile fund was changed to a first-quartile fund; funds that fell out of the first quartile were replaced every three years; the plan sponsors used index funds instead of actively managed funds; and the sponsor used a crystal ball to predict which funds would be in the first quartile.