Increasing 401(k) Participation

[Guest John Rains]

I am new to this site and apologize if this topic has been covered recently. We are evaluating plan design changes with the intent of attempting to increase participation in our 401(k).

I recall a year or two ago reading a summary of a study that outlined various plan design issues (i.e. implementing loans, increasing the company match, changing investment options, etc.) and the corresponding impact these design changes had on participation rates. Does anyone have information on this type of study, and if so, how it can be obtained?

Thanks for your help.

[Guest Lori Senter]

You might check the IFEBP -- they have lots of surveys. You might also check the archives of Employee Benefits News or other industry publications that are available for that time period.

[Dave Baker]

See also BenefitsLink, in particular the "Links by Topic" page at http://www.benefitslink.com/topics.shtml (click) ... click on 401(k) Plans and also try clicking on Surveys.

Another resource that might turn up something on point is the Search feature on BenefitsLink: http://www.benefitslink.com/search (click)

Anybody have particular comments or ideas about increasing 401(k) participation? Feel free to post a message onto this topic.

[This message has been edited by Dave Baker (edited 02-16-99).]

[MWeddell]

Most 401(k) surveys measure the situation statically, by looking for correlations between plans with higher participation rates and plans with various features. Basically a matching contribution and (to a lesser extent) offering participant loans increase participation and everything else, including number of investment funds, is irrelevant.

The one survey I saw that tried to measure the situation dynamically, i.e. did the plan sponsor take action X and if so what was the effect on the participation rate, was a Foster Higgins survey on Savings Plans. They had the question in their 1994 survey but dropped it from their 1995 survey. The question was fascinating, but apparently the survey's authors didn't agree! I don't have any more recent surveys of theirs and don't know whether the survey still is conducted annually.

[Guest jamesfdavis]

For info on the successors to Foster Higgins surveys, check out the publications sections of Mercer's web site at www.wmmercer.com. I believe Mercer charges for its surveys.