401(k) Compliance Check Questionnaire Final Report
The Final Report (pdf – 91 pages) summarizes the results from the 401(k) Compliance Check Questionnaire. The results are both:
- generalized to the 401(k) plan population that files Form 5500, and
- stratified to highlight the differences in the results by plan size.
The 401(k) Questionnaire requested information in the following areas: demographics, plan participation, contributions, designated Roth features, distributions, top-heavy and nondiscrimination testing, IRS correction programs and plan administration.
Learn more:
- FAQs regarding the Final Report
- Next Steps and Web Resources
The following chart contains highlights of the findings from the Questionnaire. Unless otherwise indicated, all findings are for the 2008 plan year.
|
Highlights of Findings |
|
|---|---|
|
Response |
% of Plans, Plan Sponsors, or Participants |
|
Plan Type |
|
| Plans that are a safe harbor 401(k) | 43% |
| Plans that use a pre-approved plan document | 86% |
| Plan sponsors that maintain a defined benefit plan | 6% |
| Plan sponsors that terminated a defined benefit plan between 1995 and 2010 | 7% |
|
Employee Contributions |
|
| Plans where participants may change deferral elections at any time | 41% |
| Plans where participants may change deferral elections only once a year | 2% |
| Plans where catch-up contributions allowed | 96% |
| Plans where designated Roth contributions allowed | 22% |
| Plans where after-tax contributions other than designated Roth allowed | 4% |
| Plans where there was an increase in per-participant dollars from 2006-2008 | 58% |
| Plans where there was a decrease in per-participant percentages of compensation deferred from 2006-2008 | 52% |
| Plans that did not need to make corrective distributions of contributions in excess of 402(g) limit for 2006-2008 | 94% |
| Plans that included an automatic contribution arrangement | 5% |
| Participants in an ACA who deferred at default rate | 43% |
| Participants in an ACA who opted out | 21% |
| Participants in an ACA who deferred at rate lower than default rate | 7% |
| Plans with an ACA that satisfied the qualified automatic contribution arrangement requirements | <25% |
| Plans with an ACA that satisfied the eligible automatic contribution arrangement requirements | <50% |
| Plan with an ACA that satisfied the both the QACA and EACA requirements | <20% |
|
Employer Contributions |
|
| Plans that provide matching contributions | 68% |
| Of plans that provide matching contribution, the percentage that require one year of service to be eligible | 58% |
| Plans that provide nonelective contributions such as profit-sharing | 65% |
| Plans that suspended or discontinued matching in 2006 | 1% |
| Plans that suspended or discontinued matching in 2008 | 4% |
| Plans that suspended or discontinued nonelective contributions in 2006 | 2% |
| Plans that suspended or discontinued nonelective contributions in 2008 | 5% |
| Plans that reduced nonelective contributions in 2006 | 1% |
| Plans that reduced nonelective contributions in 2008 | 5% |
|
Participation in Elective Deferral Contributions |
|
| Plans with no service requirement | 13% |
| Plans with one-year service requirement | 54% |
| Plans with age 21 restriction | 64% |
|
Top-Heavy |
|
| Plans that were top-heavy | 20% |
| Of plans that were top-heavy, the percentage that resolve top-heavy issues by making minimum contributions to non-key employees | 79% |
|
Nondiscrimination Testing |
|
| Of plan sponsors subject to the ADP test, the percentage that corrected excess contributions within 2 ½ months following the end of the year of the excess | 68% |
| Of plan sponsors subject to ACP test, the percentage that corrected failures by distributing excess aggregate contributions | 90% |
| Of plan sponsors subject to the ADP test, the percentage that used current year method | 60% |
| Of plan sponsors subject to the ADP test, the percentage that used prior year method | 31% |
|
Distributions |
|
| Plans that allow in-service withdrawals other than for hardship | 62% |
| Plans that permit hardship distributions | 76% |
| Plans that permit direct rollover distributions | 79% |
| Plans that provide lump sum form of benefit | 99% |
| Plans that permit participant loans | 65% |
| Plans with an increase in the number of outstanding participant loans from 2006 to 2008 | 47% |
| Plans with an increase in defaulted loans from 2006 to 2008 | 60% |
| Plans that provide involuntary cash-outs | 72% |
|
Investments |
|
| Plans that have investments in employer securities | 1% |
| Plans that have assets held in foreign investments | 1% |
|
Plan Administration |
|
| Plans that use a third-party administrator for plan administration | 53% |
| Plans sponsors that rely on third-party administrators for making timely plan amendments | 73% |
| Plans where third-party administrators are responsible for preparation of Form 5500 | 83% |
|
Determination Letters |
|
| Plan sponsors that have requested a determination letter from the IRS | 23% |
|
EPCRS |
|
| Plan sponsors that are aware of EPCRS | 65% |
| Of plan sponsors that have used EPCRS, the percentage that found it helpful | 75% |
Note: A 95% confidence level was used for all analysis. The margin of error for each key finding is in the Report and a more detailed discussion of margin of error is presented on pages 14 and 15 in the Final Report.
