Cowden Associates, Inc., the region’s leading independent actuarial and employee benefit consulting firm, today presented results from its first Tri-State 401(k) Plan Sponsor Survey. Results identify areas of 401(k) plan sponsorship and participation in need of improvement as the plans emerge as America’s primary retirement vehicle.

The survey provides a baseline for measuring the effectiveness of the Pension Protection Act, which was passed to make participation in 401(k) plans easier.

Survey results also measure how pervasive brokers in the region are in providing investment support to plan sponsors, in light of a recent federal court decision to change the way investment brokers must provide investment recommendations to 401(k) plans. In addition, survey data reveal how well regional employers understand their plans and responsibilities as plan sponsors.

"With the 401(k) plan emerging as America’s primary retirement plan, it is critical for plan sponsors to understand how to build an effective plan," said Jim Bartoszewicz, executive vice president of Defined Contribution & Investment Advisory Services for Cowden Associates. "In fact, employers as plan sponsors are bound by law to support their employees’ retirement planning.

"This survey represents a baseline to measure future improvement in 401(k) plan sponsorship and participation. It’s also illustrates where the greatest needs are to achieve strong retirement plans."

The following is a sample of findings from plan sponsor survey responses.

• 50 percent report that their employees defer an average of 5 to 6 percent of their pay to their plans (although studies indicate the target deferral rate should be 10 percent for a comfortable retirement income).
• Fewer than 25 percent automatically enroll employees in their 401(k) plans.
• Fewer than 10 percent periodically increase the deferral percentages that employees can contribute to the plan.
• 44 percent use registered investment advisers to select plan investment options.
• 35 percent change plan investment options every two to five years.
• 97 percent are comfortable that they are meeting their fiduciary responsibilities.
• 50 percent do not have an Investment Policy Statement or do not know what theirs includes.

Journalists can obtain a comprehensive copy of survey results by contacting Jason Snyder at 412-894-7828 or jason.snyder@wordwritepr.com.