The eighth annual MullinTBG/PLANSPONSOR Executive Benefits Survey
reveals while general plan participation rates were up only slightly to
46% (from 43.9% in 2012), 30% of survey webinar registrants observed
higher participation, 19% higher deferral amounts and MullinTBG saw a
10.5% increase in enrollment. Similar to previous survey results,
participation rates were highest (56%) for firms that offered a company
match. MullinTBG is a Prudential Financial, Inc. company (NYSE:PRU).
The survey, the longest-running of its kind, also revealed almost all
companies (95%) offer NQDCPs to their highly compensated employees,
making it the most common executive benefit surveyed. In 2012, roughly
90 percent of responding companies said they offered a NQDCP.
“With NQDCP prevalence at such a high, there is no doubt that these
executive benefits are crucial to recruiting and retaining high-quality
employees,” said George Castineiras, Prudential Retirement’s senior vice
president of Total Retirement Solutions.
The survey also highlighted roughly 42% percent of responding companies
aspiring to make changes to their NQDCPs in the future said they hope to
enhance plan education and communication programs.
“Providing expert resources that can help participants validate their
plan choices and create a financial plan that will enable them to
achieve a successful, comfortable retirement is one way to take some of
the guesswork out of decision-making and realize the potential of their
executive benefit packages,” said Yong Lee, chief operating officer at
MullinTBG.
Additionally, nearly half (45%) of companies reported offering a
financial planning advice component for their plan participants.
“In-plan offerings designed to support executives’ retirement readiness
are a notable trend,” Lee continued. “Offering model or managed
portfolios, retirement income-generating options and financial planning
advice demonstrate that plan sponsors are responding to concerns about
their employees’ retirement readiness.”
Other survey highlights include:
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Criteria used for determining NQDCP eligibility varied amongst
categories, with title (23.5%) and job grade (23%) cited most often.
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Informal funding continues to be a popular strategy for managing NQDCP
asset-to-liabilities (57.2%), with companies primarily utilizing
corporate-owned life insurance (46.2%) and mutual funds (44.7%).
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There was a significant uptick in the use of stock options as an
executive benefit in 2013 – up to 50 percent from 41.5 percent in 2012.
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Restricted stock units also experienced a noticeable rebound as well,
to 57.6 percent, compared to 41.7 percent in 2011 and 43.4 in 2012.
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Rabbi trusts maintain their position as the top choice for a security
vehicle, employed by 97% of respondents who have a security vehicle
for their NQDCP.
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The vast majority of companies (70%) rely exclusively on a third-party
recordkeeper to administer their NQDCPs.
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About 70% of plan sponsors rated their plan as either “effective” or
“extremely effective.”
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77.8% of respondents reported that their NQDCP was offered to “provide
a vehicle for retirement savings.”
MullinTBG is a Prudential Financial company and one of the nation’s
largest providers of nonqualified executive benefits, with 817
customized plans and over $25.2 billion in total assets as of December
31, 2013, representing 74,400+ corporate executives. The firm is
headquartered in Los Angeles (El Segundo) and has regional offices in
Chicago, Dallas, Irvine, New York and Orlando. For more information,
please go to www.mullintbg.com.
Prudential Retirement delivers retirement plan solutions for public,
private, and non-profit organizations. Services include state-of-the-art
record keeping, administrative services, investment management,
comprehensive employee investment education and communications, and
trustee services. With over 85 years of retirement experience,
Prudential Retirement helps meet the needs of over 3.8 million
participants and annuitants. Prudential Retirement has $322.9 billion in
retirement account values as of December 31, 2013. Retirement products
and services are provided by Prudential Retirement Insurance and Annuity
Company (PRIAC), Hartford, CT, or its affiliates.
Prudential Financial, Inc. (NYSE:PRU), a financial services leader with
more than $1.1 trillion of assets under management as of December 31,
2013, has operations in the United States, Asia, Europe, and Latin
America. Prudential’s diverse and talented employees are committed to
helping individual and institutional customers grow and protect their
wealth through a variety of products and services, including life
insurance, annuities, retirement-related services, mutual funds and
investment management. In the U.S., Prudential’s iconic Rock symbol has
stood for strength, stability, expertise and innovation for more than a
century. For more information, please visit www.news.prudential.com.
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Copyright Business Wire 2014