Corporate office (Image: Thinkstock)(Image: Thinkstock)

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Eighty-six percent of defined contribution plan sponsors in a newsurvey offered a 401(k) plan as the primary DC plan, and 85% ofsurveyed plans offered a Roth feature — up from 68% in 2016.

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Callan, an employee-owned investment consulting firm, conductedan online survey in September and October among 106 DC plansponsors, including both Callan clients and otherorganizations.

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Some 90% of plans in the survey had more than $100 million inassets; 62.2% were “mega plans” with upward of $1 billion inassets.

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Plan sponsors said the most important step in improvingfiduciary positioning in 2019 was reviewing plan fees.

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Plan fees replaced retirement readiness, last year's highestrated area, which fell to the middle of the priority list for2019.

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“With the amount of fee study and recordkeeper search projectwork we see, it is not surprising that fees are the No. 1 priorityfor plan sponsors in 2019,” the report's co-author and a Callan DCconsultant, JamieMcAllister, said in a statement.

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“What is surprising: Over 40% of plan sponsors said they don'tevaluate indirect revenue when calculating and benchmarking fees.As indirect revenue can be a meaningful amount, we feel it'simportant for sponsors to consider this in their overall feeevaluation.”

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One in five plans in the survey said they intended to conduct arecordkeeper search in 2019.

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Callan also found that fee payments were shifting away fromparticipants, as 32.5% of all administrative fees were paidentirely by participants last year, way down from 62.7% in2017.

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Survey respondents indicated participant communication andfinancial wellness (a new category in this year's survey) were thenext two highest areas of focus for 2019. Callan said prioritizingfinancial wellness and communications would likely go hand-in-handthis year.

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Although cybersecurity has been much in the news, respondents put it dead last as apriority area for 2019.

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Surveyed plans reported that participation rate/plan usage wasthe most important indicator of plan success in 2018, the same asthe previous two years, followed by contribution/savings rate, costeffectiveness and investment performance.

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Twenty-two percent of plan sponsors said they had made a changeto their company match policy in 2018, a significant increase from2.3% that did this in 2017.

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In addition, more than a third anticipated making a change in2019, with 23% planning to increase the match and only 6.6% sayingthey would eliminate or reduce it.

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Fifty-eight percent of plan sponsors said they had a policy onasset retention. Seventy percent were focused on retaining assets,many of them offering an institutional structure that was more costeffective than anything in the retail market.

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A recent study found that three in five 401(k)plan sponsors preferred that retired/separated participants taketheir savings and leave the plan.

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Eighty-four percent of plans in the Callan survey said theyworked with an investment consultant, with 68% using only a 3(21)nondiscretionary advisor and 16% exclusively or partially using a3(38) discretionary one.

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Sixteen percent were unsure whether they used a discretionary or nondiscretionaryconsultant.

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Eighty-seven percent of plans reported that they had a targetdate fund, and 75% said they used collective trusts in their fundlineups.

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READ MORE:

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What will retirement planning look like in2020?

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Top 4 trends shaping retirement incomeproducts

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7 trends in 2019 for the retirementindustry

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