New York Region Executives Active in 401(k) Plans
August 10, 2008
Senior executives in the New York, New Jersey and Connecticut tri-state area are taking a more hands-on approach to managing employee 401(k) plans, a new survey shows.
The survey, by Cowden Associates, a Pittsburgh-based retirement consulting firm, found that 94% of senior executives in the tri-state area are helping to oversee their companies’ 401(k) plans, up from 30% a year ago.
“Recent legislation, including the Pension Protection Act and the Supreme Court’s ruling that individuals can sue defined contribution plan sponsors who mismanage their funds, has been a real wake-up call for plan sponsors,” said Jim Bartoszewicz, executive vice president at Cowden. “In just one year, we're seeing a significant shift in the way defined contribution plans are managed.”
The findings showed that senior managers serve on their plans’ investment/retirement committees, are responsible for selecting and monitoring their plans’ investment options, make plan design changes and oversee plan service providers and their fees.
The survey, which encompassed 128 employers, also found that 25% of companies automatically enroll employees in 401(k) plans, up from 16% in 2007, and automatically deduct a prescribed amount, normally 2% to 3% of the person’s salary unless they opt out.
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