A recent study of large versus small 401(k) plans shows that small plans perform as well – or better – than their larger peers. Judy Diamond Associates, a sister firm of BenefitsPro, culled data from about 52 million participants with $4 trillion in assets.
The study, about which more information is available here, compared plan size, industry, participate rates, levels of contributions, account balances, and returns.
After aggregating the results for all industries, the smallest plans, with one to 10 participants, posted a score of 62, the highest among eight levels of plan size…. By comparison, the largest plans, with 5,000 or more participants, which accounted for 1,793 total plans, posted an average score of 57, the third highest among the eight segments.
Digging the in the details, the study uncovered the following nuggets, via BenefitsPro:
More than 178,000 plans fall into [the small] size group, more than all other segments. The average account balance was $75,735, and participation rates averaged 89 percent, both tops by plan size. Average employee and employer contributions–$4,850 and $1,979 respectively—were also more than all other size segments.
The average account balance for the largest plans was $54,513, and the average participation rate was 73 percent. Employee and employer contributions averaged $3,067 and $1,424, respectively.