RESEARCH |
2020
PLANADVISER Micro Plan Survey
Micro plans have much to gain from adviser help with fiduciary matters
Reported by PLANADVISER
Industry Data
Investments
| Composition of Investment Committee for the DC Plan | |||
|---|---|---|---|
| All Plans | <$1MM | $1MM–$5MM | |
| Internal employees only | 43% | 16% | 25% |
| Employees and non-employees | 31% | 10% | 21% |
| No investment committee | 18% | 54% | 41% |
| Unsure/Don’t know | 4% | 16% | 8% |
| External non-employees only | 3% | 4% | 4% |
| Unsure of composition | 1% | 1% | 2% |
| Income-Oriented Products/Services Offered | |||
|---|---|---|---|
| All Plans | <$1MM | $1MM–$5MM | |
| At retirement: Systematic withdrawal option | 44% | 28% | 29% |
| In-plan: Professional managed account service | 24% | 13% | 18% |
| In-plan: No guarantees | 10% | 10% | 9% |
| In-plan: Guaranteed monthly income | 9% | 9% | 8% |
| Out-of-plan: Annuity purchase | 5% | 4% | 3% |
| No income-oriented products | 48% | 65% | 63% |
Frequency of Formal Review of Investment Options
| All Plans | <$1MM | $1MM–$5MM | |
|---|---|---|---|
| Quarterly | 41% | 19% | 20% |
| Twice a year | 16% | 5% | 14% |
| Annually | 30% | 42% | 43% |
| Every 1 to 2 years | 3% | 4% | 4% |
| Every >2 years | 3% | 3% | 4% |
| Unsure/Don't know | 8% | 28% | 16% |
| Types of Investment Options Offered | |||
|---|---|---|---|
| All Plans | <$1MM | $1MM–$5MM | |
| Target-date funds | 81% | 59% | 76% |
| Balanced fund(s) | 66% | 53% | 68% |
| Money market fund | 57% | 43% | 57% |
| Stable value fund | 57% | 24% | 37% |
| Target-risk funds–e.g., growth, conservative. | 41% | 39% | 52% |
| Professionally managed account service | 31% | 20% | 27% |
| Real estate/REITs9 | 27% | 14% | 21% |
| Environmental, Social, and Governance (ESG) | 11% | 6% | 9% |
| Sector Funds | 11% | 8% | 10% |
| Commodity Funds (i.e., gold/precious metals, oil) | 7% | 3% | 6% |
| Employer stock | 6% | 1% | 1% |
| Alternative investments–e.g., hedge funds, private equity. | 5% | 6% | 5% |
|
9Real estate investment trusts. |
|||
| Investment Vehicles Used in DC Plan | |||
|---|---|---|---|
| All Plans | <$1MM | $1MM–$5MM | |
| Mutual funds | 93% | 87% | 90% |
| Self-directed brokerage window | 23% | 16% | 14% |
| Separate accounts | 20% | 20% | 20% |
| Collective investment trusts | 19% | 15% | 9% |
| ETFs10 (outside of brokerage windows) | 10% | 11% | 13% |
| Mutual fund window | 5% | 6% | 6% |
| 10Exchange-traded funds | |||
Number of Investment Options Offered
All Plans
22.9
Average
<$1mm
20.8
Average
$1mm – $5mm
25.3
Average
All Plans
21.0
Median
<$1mm
20.5
Median
$1mm – $5mm
24.0
Median
Number of Investment Options Held by Participants
All Plans
6.3
Average
<$1mm
6.0
Average
$1mm – $5mm
7.3
Average
All Plans
4.0
Median
<$1mm
3.0
Median
$1mm – $5mm
5.0
Median