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A recently released IRS survey shows some trends in the design of 401(k) plans. Plan sponsors may find the results of interest as they consider any design changes to their own 401(k) plans.

The IRS sent a questionnaire to over 1,000 sponsors of 401(k) plans in 2010. The questionnaire elicited responses on a number of design elements, including those relating to eligibility, contributions, loan, and withdrawal features. Ninety-eight percent of the plan sponsors responded.

Some of the findings include the following:

Plan Design Feature
% of Plans with that
Design Feature
Plan is a safe harbor 401(k) (requires minimum guaranteed
employer contribution but avoids some nondiscrimination testing)
Participants may change deferral elections at any time  41%
Participants may change deferral elections only once a year  2%
Catch-up contributions allowed by participants over age 50  96%
Designated Roth contributions allowed  22%
After-tax contributions other than designated Roth allowed  4%
Provide employer matching contributions  68%
Require one year of service to be eligible for matching contributions  58%
Provide nonelective employer (profit sharing) contributions  65%
No service requirement to make elective deferral contributions  13%
One-year service requirement to make elective deferral contributions  54%
Age 21 eligibility requirement  64%
Allow in-service withdrawals  62%
Permit hardship distributions  76%
Permit participant loans  65%

A copy of the survey questionnaire and an interim report can be found at,,id=253875,00.html. A more detailed report on the findings is expected to be issued by the IRS in December 2012.

The use of particular design features can vary greatly based on the industry, geography, and size of the employer. Nonetheless, the results of this IRS survey still can provide a useful benchmark to which employers can compare and consider the design of their 401(k) plans.

McCord, T.J. (2012, June 11). IRS survey of 401(k) plans reveals trends in 401(k) plan design. Benefits Alert. Retrieved June 11, 2012, from