401(k) plan sponsors typically offer employer contributions, often in combination with the availability of plan loans, to encourage worker participation in the plans, according to an updated study on 401(k) plans from BrightScope and the Investment Company Institute (ICI). The report, The BrightScope/ICI Defined Contribution Plan Profile: A Close Look at 401(k) Plans, 2017, uses data from the Department of Labor (DOL) Form 5500 and the BrightScope Defined Contribution Plan Database. This update mainly focuses on 2017 data from large 401(k) plans—large plans are typically those with 100 participants or more, as defined by the DOL—that filed detailed audited reports as part of their Form 5500 filing with the DOL.
Employer contributions are widespread in these large 401(k) plans: 86 percent of large 401(k) plans, covering 92 percent of large 401(k) plan participants, had employer contributions in 2017. Seventy-eight percent of large 401(k) plans had participants with plan loans; employer contributions and plan loans were the most common combination of plan design features, offered by 46 percent of 401(k) plans. A third feature, automatic enrollment of workers, was offered by 29 percent of large 401(k) plans. More than one-fifth (22 percent) of large 401(k) plans had all three plan design features.
The study found that 401(k) plan sponsors offer a wide and diverse range of investment options to encourage their employees to contribute toward their retirement savings. In 2017, the average large 401(k) plan offered 28 investment options, including a mix of equity funds, bond funds, and target date funds. In 2017, nearly all large 401(k) plans offered domestic and international equity funds, and domestic bond funds; 82 percent of large 401(k) plans offered target date funds; 70 percent offered guaranteed investment contracts (GICs); 64 percent offered other types of balanced funds; 45 percent offered money funds; and 21 percent offered international bond funds.