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Reference Point Annual Benchmarking Report

Reference Point delivers expertise and best practices for designing your plan and engaging participants.

It also provides trend analysis and expert commentary you can use to take advantage of emerging best practices and improve plan effectiveness. This valuable resource gives you tools for making informed decisions for your plan.

2019 Annual Report Highlights

Market conditions improved in 2019 following volatility in late 2018, leading to lower rates for cash-out distributions and loans and increases in plan participation. Average account balances also recovered to just over $100,555 in 2019, up from $85,336 in 2018.

>79%

participation across plans

Potential Driving Factors:

  • Improved market conditions
  • Increased match formulas
  • Plan design solutions
  • Personalized experiences
  • Wage growth

Plan design and improved market outlook drove positive outcomes:

  • Over 61% of plans at T. Rowe Price automatically enroll participants, with 37% enrolling at a 6% default deferral.
  • Employers are increasing match formulas, with an effective match range of 4% to 5%.
  • Average account balances rose to over $100,000, an increase of 8%.
  • Allocations to money market and stable value investments hit a five-year low as participants moved money to stocks and target date investments.
  • Loan usage and direct rollovers increased, while cash-out distributions decreased.

10%

average increase in hardship withdrawal amounts

Potential Driving Factors:

  • Increasing financial challenges
  • Continued market uncertainty

Challenges remain, presenting opportunities for plan sponsors:

  • Over 34% of eligible participants did not contribute in 2019.
  • Allocations to company stock rose to more than 11% in large plans (greater than $1 billion in total assets).
  • Average loan balances and average hardship distribution amounts increased, with hardships rising by over 10%.

About the Report

Unless otherwise noted, all data included in this report are drawn from the following sources: Data are based on the large-market, full-service universe—T. Rowe Price total—of T. Rowe Price Retirement Plan Services, Inc., retirement plans (401(k) and 457 plans), consisting of 677 plans and over 1.9 million participants.

For more information on this report or where you can get additional industry-specific data to support your plan design discussions, please contact your T. Rowe Price representative.

This material is provided for general and educational purposes only and is not intended to provide legal, tax, or investment advice. This material does not provide fiduciary recommendations concerning investments, nor is it intended to serve as the primary basis for investment decision-making.

© Copyright 2020, T. Rowe Price Investment Services, Inc., Distributor. All rights reserved.