Those of you who hung around for the last session at the 2023 NAPA 401(k) Summit got a special treat — our own advisor version of Family Feud…
Our version includes Team Wirehouse/Independents in a rematch against Team Aggregators to see who could best match the responses provided by plan sponsor surveys on a series of relevant questions in a match that was not only for bragging rights, but for charity, as NAPA made a $5,000 contribution to a charity selected by the winners.
While both teams performed magnificently, there were some perspectives that eluded them, at least in the heat of the competition. This week we thought you might enjoy the opportunity to consider these perspectives — and consider how you might have done on the stage (or in preparing for that client presentation).
Some were drawn from a series of Plan Sponsor Council of America (PSCA) QOTW (question of the week) plan sponsor surveys, some from a “snapshot” PSCA poll, and several from one of four of PSCA’s industry trend surveys. Where fully accessible, links to the results are below.
What qualities are most important in selecting a retirement plan advisor?
Reasons for not offering automatic enrollment
Which element of a financial wellness program do you consider most valuable?
27% – Personal finance education
27% – Access to financial planning professionals
20% – Budgeting tools
13% – Starting an emergency fund
9% – Student debt relief/management
3% – Retirement income estimates
1% – Estate planning
Measurements used to evaluate the success of education programs:
41% – Participation rates
34% – Deferral rates
12% – Total savings rates
7% – Replacement rates
5% – Monthly projected income streams
Reasons for NOT offering automatic enrollment:
42% – Satisfied with participation rate
18% – Corporate philosophy
15% – Cost
11% – Added administrative work
10% – Employees don’t want it
4% – Considering adding (which, arguably isn’t so much a reason for not offering, as an explanation for not offering YET)
Reasons for NOT offering an ESG fund:
26% – Haven’t considered (editor’s note: as it is, they weren’t offering one because they hadn’t even considered the option — interesting that it was the most common response in this category)
20% – Insufficient participant interest
20% – Unclear regulatory factors
14% – Lack of a clear definition
11% – Advisor recommendation (editor’s note: those in attendance seemed to think this was an advisor who had recommended ESG, but advice that was rejected. My sense is that the advisor had recommended NOT offering an ESG fund. But who knows?)
9% – Lack of benchmarking
Reasons for offering a NQDC plan:
44% – Have a competitive benefit package
22% – Help eligible employees accumulate assets
10% – Retain eligible employees
8% – Have an above average benefit package
6% – So HCEs can defer same proportion as other EEs
6% – Achieve overall objective of plan
3% – Offer a tax-planning device to eligibles
1% – Help eligibles raise income replacement ratio
Primary Reasons for NOT Offering a NQDC Plan:
46% – Not aligned with corporate culture
28% – Not convinced of value
24% – Expense
1% – Reducing executive comp
Participant behaviors that organizations monitor:
28% – Contribution levels
20% – Loan usage
17% – Hardship withdrawals
17% – Investment allocations
8% – Investment of Roth deferrals
7% – Fund transfers
3% – None
Thanks to everyone who participated in the NAPA 401(k) Summit, those who made it such fun by participating in the event itself, a special H/T to Tina Sanchez and Bill Harmon as our co-hosts, and everyone who participates in our weekly NAPA-Net Reader Radar polls!
