DC Conversations: An industry assessment of Defined Contribution Plans.

DC Conversations: An industry assessment of Defined Contribution Plans

Overview BMO Global Asset Management’s DC Conversations: An industry assessment provides financial advisors and retirement plan sponsors with a comprehensive array of charts and graphs designed for you to help plan sponsors evaluate their retirement plan programs against a variety of benchmarks. We hope this annual publication allows you to have better conversations around potential plan changes for your clients and prospects. Some of these better conversations may include automatic enrollment (see page 12) or investment options (see page 33) to help assist plan participants achieve better outcomes. These illustrations include a wide range of retirement plan benchmarks and a number of newly identified and ongoing industry trends – each depicted in a ready-to-present format. We encourage you to use different pages or slides from DC Conversations: An industry assessment to build better conversations with your existing and potential clients. We believe better conversations result in better outcomes. Let’s start a DC Conversation today! Contact us 1-844-BMO-Fund ( ) bmogamviewpoints.com bmo-global-asset-management

Table of contents Eligibility and participation 4
Automatic enrollment 12 Employer contributions 17 Participant account balances 29 Investments 33 Plan expenses 41 References 45 Disclosures 46

Eligibility and participation
Minimum age requirements for eligibility by plan size Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Plan size No minimum age 15.9% 1-49 50-199 1,000-4,999 5,000+ All plans 12.2% 20.3% 42.9% 54.1% 28.1% 18 years old 28.4% 39.2% 40.8% 21.3% 29.8% 21 years old 68.2% 58.1% 37.8% 16.3% 24.6% 41.1% Other minimum age 0.0% 1.4% 2.7% 0.0% 0.0% 1.0% Source: PSCA 2016

Participation rate by number of participants Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures All plans 89% 2015 2014 2013 2012 2011 2010 2009 2008 87% 80% 81% 80% 77% 82% 83% 5,000+ 84% 83% 77% 76% 75% 73% 81% 78% 1,000–4,999 92% 87% 77% 80% 78% 73% 76% 80% 200–999 89% 86% 78% 82% 78% 76% 81% 82% 50–199 90% 83% 82% 82% 77% 86% 84% 1–49 91% 94% 87% 86% 86% 83% 91% Source: PSCA 2016

Distribution of participation rates Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 2006: 75%1 2007: 76%1 2008: 77%1 2009: 76%1 2010: 76%1 17% 23% 16% 8% 31% 20% 14% 7% 30% 24% 11% 29% 10% 28% 90–100% 80–89% 70–79% 60–69% 50–59% <50% 34% 25% 15% 9% 6% 21% 19% 12% 35% 2015: 78%1,3 2011: 77%1 2012: 78%1 2013: 78%1 2014: 79%1,2 Source: Vanguard 2016 1 Average plan participation rate. 2 The previously reported plan-weighted participation rate for 2014 was 77%. 3 Preliminary The 2015 participation rates are drawn from a subset of plans that had completed nondiscrimination testing by March 2016 and represents approximately half of the clients for whom we perform testing. When testing has been completed for all plans, the data is restated. Plans that complete testing by March generally have lower participation rates and include plans with concerns related to passing nondiscrimination testing. The previously reported plan- and participant-weighted participation rates for 2014 were 76% and 67%.

Participation rate by age and plan design Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <25 37% 25% 81% 25–34 62% 51% 88% 35–44 68% 61% 45–54 71% 65% 90% 55–64 74% 69% 91% 65+ 64% 87% All plans Voluntary enrollment Automatic enrollment Source: Vanguard 2016

Participation rate by salary and plan design Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <$30,000 42% 29% 82% $30,000–$49,999 64% 53% 90% $50,000–$74,999 69% 62% 92% $75,000–$99,999 74% 94% $100,000+ 87% 85% 96% All plans Voluntary enrollment Automatic enrollment Source: Vanguard 2016

Participation rate by years of service and plan design Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 0–1 48% 33% 82% 2–3 67% 56% 92% 4–6 71% 63% 7–9 73% 68% 10+ 77% 93% All plans Voluntary enrollment Automatic enrollment Source: Vanguard 2016

Participation rate by industry Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Construction 79% 84% 77% 78% 75% 81% 83% 85% 89% 91% 93% 92% 67% 70% 61% 66% 68% 87% 80% 86% 73% 76% 74% 82% 2015 2014 2013 2012 2011 Durable goods manufacturing Health care Non-durable goods manufacturing Financial Insurance and real estate Services Technology and communications Wholesale and retail trade Utility and energy Other Source: PSCA 2016

Participation rate by contribution Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Fixed match 82% 84% 81% 80% 83% 85% 79% 87% 78% 73% 88% 75% 77% 74% 67% Safe harbor match Discretionary match Graded match Other contributions 2015 2014 2013 2012 2011 2010 2009 2008 No matching company contribution Source: PSCA 2016

Automatic enrollment Percentage of plans with automatic enrollment by number of employees Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 1–49 19% 26% 14% 12% 70% 75% 64% 65% 63% 59% 55% 54% 48% 31% 67% 62% 56% 53% 41% 44% 50% 47% 46% 42% 38% 40% 36% 24% 25% 52% 58% 11% 16% 7% 8% 45% 37% 33% 22% 10% 60% 49% 30% 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 50–199 200–999 1,000–4,999 5,000+ All plans Source: PSCA 2016

Automatic enrollment Percentage of automatic enrollment plans by industry Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Construction and engineering 56% 58% 41% 47% 38% 49% 45% 40% 39% 29% 46% 36% 52% 67% 44% 37% 50% 43% 48% 34% 72% 69% 57% 33% 55% 64% 63% 54% 62% 60% 81% 86% 73% 70% Durable goods manufacturing Health care Non-durable goods manufacturing Financial Insurance and real estate Services Technology and telecommunications Wholesale and retail trade Utility and energy Other 2015 2014 2013 2012 2011 Source: PSCA 2016

Automatic enrollment Default deferral percentage of pay
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <3% 9% 7% 13% 14% 11% 12% 10% 6% 18% 21% 15% 8% 16% 20% 51% 41% 47% 52% 54% 62% 58% 57% 59% 53% 4% 3% 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 5% >5% Source: PSCA 2016

Automatic enrollment Vesting schedules Eligibility and participation
Employer contributions Participant account balances Investments Plan expenses References Disclosures Contribution type Immediate full vesting 38.9% Match Profit sharing 31.2% 5.0% 2-year cliff vesting 3-year graduated vesting 16.1% 2.9% 12.6% 5.7% 3-year cliff vesting 3.5% 4-year graduated vesting 2.8% 2.3% 18.3% 17.7% 5-year graduated vesting Other 23.5% 12.0% 4.8% 6-year graduated vesting 0.0% Source: PSCA 2016

Automatic enrollment Eligibility and participation
Employer contributions Participant account balances Investments Plan expenses References Disclosures Percentage of 401(k) plans and percentage of participants in 401(k) plans with automatic entollment by plan assets, 2014 All plans >$1M to $10M >$10M to $50M >$50M to $100M >$100M to $250M >$250M to $500M >$500M to $1B 56.5% 46.3% More than $1B 59.4% 47.4% Plans Participants 27.0% 17.2% 32.6% 44.1% 51.4% 54.0% 38.0% 15.1% 30.5% 36.9% 40.9% 43.0% Percentage of 401(k) plans and percentage of participants in 401(k) plans with automatic entollment by number of plan participants, 2014 100 to 499 500 to 999 1,000 to 4,999 5,000 to 9,999 10,000 or more 22.5% 37.2% 37.4% 42.5% 43.4% 46.9% 41.0% 24.9% Note: The sample is 50,115 plans with $3.7 trillion in assets. The results exclude 403(b) plans with a 401(k) feature and plans with fewer than 100 participants or less than $1 million in plan assets. Sources: BrightScope Defined Contribution Plan Database and Investment Company Institute tabulations of US Department of Labor 2014 Form 5500 Research File

Employer contributions
Types of employer contribution Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Matching contributions only 40% 49% 2015 2014 2013 2012 2011 2010 37% Non-matching contributions only 13% 14% 16% 12% Both matching and non-matching contributions 34% 42% 43% 41% No contribution 4% 5% 7% Source: PSCA 2016

Structure of fixed match formulas Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <$0.25 $0.50-$1.00 3% 5% 1% 2% 4% 9% 8% 10% 14% 6% 39% 35% 44% 12% 11% 52% 48% 40% 38% 28% 24% 26% 49% 50% $0.50 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 $0.25 $0.25–$0.50 $1.00 >$1.00 36% Source: PSCA 2016

Matching formulas used in plans with fixed and discretionary matches by industry type Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Durable goods manufacturing 5% 19% 38% 10% 0% Non-durable goods/utility or energy 3% 7% 4% 24% 18% 43% 46% 14% Wholesale and retail trade <$0.25 $0.25 $0.25–$0.50 $0.50 $0.50–$1.00 $1.00 >$1.00 8% 16% 9% 37% 6% Services 0% 39% 42% 27% 20% 44% Financial 0% Insurance and real estate Source: PSCA 2016

Average matching contribution by industry type Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Durable goods manufacturing $0.59 $0.84 $0.70 $0.78 $0.65 $0.67 $0.57 $0.68 $0.61 $0.53 $0.66 $0.55 $0.51 $0.40 $0.60 $0.69 $0.73 $0.75 $0.72 $0.54 $0.56 Non-durable goods/utility or energy Wholesale and retail trade Financial Insurance and real estate $0.64 $0.63 $0.62 $0.71 $0.58 Services All plans 2015 2014 2013 2012 2011 2010 2009 2008 2007 Source: PSCA 2016

Percentage of pay matched by industry type Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Durable goods manufacturing 5.5% 6.4% 5.2% 5.0% 4.9% 4.7% 4.5% 5.1% 5.9% 5.3% 5.7% 5.4% 5.8% 4.8% 2015 2014 2013 2012 2011 2010 2009 2008 2007 Non-durable goods/utility or energy Wholesale and retail trade Financial Insurance and real estate Services All plans 4.6% 6.0% 6.1% Source: PSCA 2016

Dispersion of employee deferral rates by percent of compensation deferred Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 0.1–3.9% 30% 32% 28% 29% 23% 22% 25% 26% 27% 13% 14% 15% 6% 7% 10.0–14.9% 15.0%+ 6.1–9.9% 2015 2014 2013 2012 2011 2010 2009 2008 4.0–6.0% Source: Vanguard 2016

Deferral rate by industry sector Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Overall 6.8% 6.9% 7.8% 7.9% 8.2% 7.6% 7.7% 8.0% 8.1% 7.4% 6.4% 7.0% Business, professional and non-profit 8.3% 6.2% 6.5% 6.7% 6.6% 7.1% 6.3% 7.3% 2015 2014 2013 2012 2011 2010 Agriculture, mining and construction Media, entertainment and leisure 6.1% 5.8% 5.9% 6.0% Transportation, utilities and communications Manufacturing Finance, insurance and real estate Education and health Wholesale and retail trade Source: Vanguard 2016

Deferral rate by salary Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures < $30K 4.6% 4.7% 4.4% 4.8% 5.7% 5.5% 5.6% 5.8% 6.9% 6.8% 7.0% 7.1% 7.8% 7.7% 8.3% 8.4% 8.2% 8.0% 2015 2014 2013 2012 2011 2010 2009 $30K–$50K $75K–$100K $50K–$75K $100K+ Source: Vanguard 2016

Deferral rate by age Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures < 25 4.6% 4.5% 4.3% 4.2% 3.9% 3.8% 5.5% 5.6% 5.4% 5.3% 6.3% 6.4% 6.2% 6.1% 7.3% 7.4% 7.2% 8.7% 8.8% 8.6% 10.2% 10.0% 10.1% 9.9% 35–44 2015 2014 2013 2012 2011 2010 2009 25–34 45–54 55–64 65+ Source: Vanguard 2016

Deferral rate by job tenure (years) Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures < 2 4.7% 4.9% 4.4% 4.8% 6.2% 6.1% 6.5% 6.0% 5.8% 7.0% 6.9% 6.8% 6.4% 7.3% 7.2% 7.1% 10+ 8.0% 8.1% 7.7% 2015 2014 2013 2012 2011 2010 2009 2–3 7–9 4–6 Source: Vanguard 2016

Deferral rate by account balance Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures < $10K 3.8% 3.7% 3.6% 6.1% 6.3% 5.9% 5.7% 5.8% 7.1% 6.9% 7.0% 6.8% 8.1% 8.3% 7.9% 8.2% 8.4% 9.6% 9.5% 9.8% 9.9% 10.0% 10.2% 10.7% 10.5% 10.6% $25K–$50K 2015 2014 2013 2012 2011 2010 2009 $10K–$25K $50K–$100K $100K–$250K >$250K 7.3% Source: Vanguard 2016

Design of 401(k) employer contributions Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Percentage of plans by plan assets, 2014 Percentage of partcipants by plan assets, 2014 All plans All plans 45% 14% 2% 25% 14% 51% 15% 25% 8% 1% >$1M to $10M >$1M to $10M 37% 12% 23% 26% 41% 13% 2% 25% 20% 1% >$10M to $50M >$10M to $50M 49% 15% 2% 26% 8% 49% 15% 2% 24% 10% >$50M to $100M >$50M to $100M 53% 17% 2% 24% 5% 48% 20% 2% 23% 7% >$100M to $250M >$100M to $250M 51% 18% 2% 28% 2% 49% 17% 30% 1% 3% >$250M to $500M >$250M to $500M 46% 26% 2% 24% 2% 42% 27% 2% 27% 2% >$500M to $1B >$500M to $1B 50% 20% 3% 24% 3% 41% 30% 25% 1% 3% Simple match formula1 Tiered match formula2 Maximum dollar match3 Other employer contribution4 No employer contribution More than $1B 0% More than $1B 0% 50% 20% 29% 2% 62% 10% 23% 5% 1 Simple match formulas are employer contributions of a specified percentage of employee contributions up to a fixed percentage of employee salary (for example, matching 50 percent of employee contributions up to 6 percent of the employee’s salary). 4 Other employer contributions include nonelective contributions and lump-sum contributions without an additional matching formula. Plans with missing match data may be included in this category. Note: The sample of plans with employer contributions is 13,552 plans with $1.1 trillion in assets. The percentage of plans without employer contributions is derived from the complete sample of 401(k) plans which filed a Schedule H. Plans with less than $1 million in assets were excluded from this analysis. Components may not add to 100 percent because of rounding. 2 Tiered match formulas match employee contributions at different rates for different levels of employee contributions (for example, matching 100 percent of the first 4 percent of salary contributed and 50 percent of the next 2 percent). 3 Maximum dollar match formulas are employer contributions of some percentage of employee contributions up to a fixed dollar amount (for example, matching 50 percent of the first $2,000 of employee contributions). Source: BrightScope Defined Contribution Plan Database

Participant account balances
Distribution of account balances Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures  <$10,000  $10,000–$19,999  $20,000–$39,999  $40,000–$59,999  $60,000–$79,999  $80,000–$99,999  >$100,000 33% 12% 13% 8% 4% 5% 25% Source: Vanguard 2016

Account balance by age Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <25 $4,048 $1,385 25–34 $22,187 $8, –44 $60,528 $23,944 45–54 $116,192 $46,200 55–64 $177,805 $71,579 >65 $200,358 $68,588 Average Median Source: Vanguard 2016

Account balance by job tenure (years) Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures <2 $10,247 $2,334 2–3 $24,329 $10,278 4–6 $46,120 $22,528 7–9 $76,720 $39,746 10+ $187,575 $95,638 Average Median Source: Vanguard 2016

Account balance by industry sector Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Agriculture, mining and construction $68,547 Manufacturing $100,271 $32,720 Business, professional and nonprofit $110,976 $29,244 $95,275 $29,578 Transportation, utilities and communications $83,658 $23,874 Wholesale and retail trade $80,724 $20,363 Media, entertainment and leisure $76,247 $25,125 Education and health $64,565 $15,267 $222,084 Average Median Finance, insurance and real estate Source: Vanguard 2016

Investments Default investment vehicle Eligibility and participation
Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Stable value/money market 2% 5% 1% 6% 4% 3% 7% 11% 10% 13% 12% 14% 16% 9% 27% 20% 18% 21% 75% 79% 72% 73% 70% 53% 57% 60% 49% Balanced Lifestyle/target risk Other 2015 2014 2013 2012 2011 2010 2009 2008 2007 Lifecycle/target date Source: PSCA 2016

Investments Number of investments available for participant direction
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 1.5% 8.0% 4.0% 19.1%  1  2–9  10  11–15  16–20  21–25  26+ 23.9% 16.2% 27.3% Source: PSCA 2016

Investments Number of investments available by plan size
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures 1–49 24 21 20 19 22 23 200–999 18 17 1,000–4,999 5,000+ 16 15 2015 2014 2013 2012 2011 2010 2009 50–199 Source: PSCA 2016

Investments Investment fund options offered
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Balanced fund/asset allocation Company stock Target date Bond - actively managed, domestic Bond - international Cash equivalents (CD/money market) 56% 50% 49% 55% 60% 62% 84% 77% 78% 79% 40% 41% 43% 54% 19% 23% 12% 27% 20% 47% 48% 51% 73% 75% 29% 22% 46% 2015 2014 2013 2012 2011 2010 2009 Equity - domestic index Equity - international index Target risk 16% 22% 22% 81% 80% 82% 32% 36% 34% 83% 87% 86% 17% 89% 90% 11% Real estate Stable value 70% 63% 67% 64% 69% 30% 26% 28% 33% 14% 18% 24% 58% 15% 66% 53% 8% 13% 76% 31% Bond - indexed, domestic Equity - domestic managed Sector - other Self-directed brokerage window Equity - international managed Other Source: PSCA 2016

Investments % 2014 Average asset allocation
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Balanced stock/bond Bond - actively managed, domestic Bond - indexed, domestic Bond - international 0% Self-directed brokerage window Cash equivalents (CD/money market) 5% 7% 6% 8% 11% 2% 1% 4% 3% 2% 4% 10% 9% 26% 24% 25% 29% 12% 23% 21% Company stock Equity - domestic index Equity - domestic managed Equity - international index Equity - international managed Target risk Target date Real estate Sector - other Stable value Other 16% 17 13% 20% 2015 % 2014 2013 2012 2011 2010 2009 Source: PSCA 2016

Investments Average asset allocation by industry sector
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Agriculture, mining and construction 13% 8% 2% 17% Business, professional and nonprofit 10% 8% 7% 24% Media, entertainment and leisure 7% 7% 9% 33% Transportation, utilities and communications 13% 7% 8% 20% Manufacturing 12% 7% 7% 28% Education and healthcare Cash/equivalent Bond funds Balanced funds Target date funds Diversified equity Company stock 33% 27% 47% 4% 41% 3% 45% 7% 41% 5% 9% 8% 30% 44% 0% Wholesale and retail trade 1% 14% 7% 30% 43% 5% Finance, insurance and real estate 11% 9% 5% 27% 45% 3% Source: Vanguard 2016

Investments Percentage of plans with audited 401(k) filings offering the specified investment option, 2014 Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Domestic equity funds 99.7 International equity funds 98.7 Target date balanced funds1 75.7 Non-target date balanced funds 67.5 Domestic bond funds 98.1 International bond funds 31.0 Money funds 51.5 GICs 69.5 Other2 61.5 Memo: index funds 89.4 1 A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. 2 Other includes commodity funds, real estate funds, and individual stocks (including company stock) and bonds, but each separate option is counted as a unique investment option. Note: The sample is 29,958 plans with $3.4 trillion in assets. Participant loans are excluded. Funds include mutual funds, collective investment trusts, separate accounts, and other pooled investment products. BrightScope audited 401(k) filings generally include plans with 100 participants or more. Plans with fewer than four investment options, more than 100 investment options, or less than $1 million in plan assets are excluded from BrightScope audited 401(k) filings for this analysis. Source: BrightScope Defined Contribution Plan Database

Investments Conditional average number of investment options in 401(k) plans by type of investment Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures All plans Average number of investment options among plans with audited 401(k) filings in the BrightScope database offering a given investment option (by plan assets, 2014) Domestic equity funds International equity funds Target-date balanced funds1 Non-target-date balanced funds Domestic bond funds International bond funds Money funds GICs Other2 Memo: index funds $1M to $10M $10M to $50M $50M to $100M 10.3 10.7 10.6 9.3 3.3 3.4 3.0 2.5 2.9 2.4 1.8 9.0 8.1 10.1 3.8 3.9 3.6 1.1 1.2 1.7 1.5 5.4 4.8 5.1 6.4 8.9 8.4 7.1 2.8 2.7 10.4 10.9 3.5 3.7 4.5 1.4 1.3 2.2 1.9 2.1 3.1 6.6 7.5 8.2 9.4 $100M to $250M $250M to $500M $500M to $1B More than $1B 1 A target date fund typically rebalances its portfolio to become less focused on growth and more focused on income as it approaches and passes the target date of the fund, which is usually included in the fund’s name. 2 Other includes commodity funds, real estate funds, and individual stocks (including company stock) and bonds, but each separate option is counted as a unique investment option. Note: The sample is 29,958 plans with $3.4 trillion in assets. Participant loans are excluded. Funds include mutual funds, collective investment trusts, separate accounts, and other pooled investment products. BrightScope audited 401(k) filings generally include plans with 100 participants or more. Plans with fewer than four investment options, more than 100 investment options, or less than $1 million in plan assets are excluded from BrightScope audited 401(k) filings for this analysis. Source: BrightScope Defined Contribution Plan Database

Plan expenses Payment of plan expenses Eligibility and participation
Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Plan Company Plan and company Audit fees Communication to employees Compensation of internal administrative staff Investment management fees Investment consultant fees Other consultant fees Legal fees Plan recordkeeping fees Trustee fees 27.7% 65.1% 7.0% 25.5% 59.7% 14.8% 29.2% 53.3% 17.5% 65.3% 18.6% 16.1% 41.5% 44.3% 14.2% 48.6% 31.2% 20.2% 45.1% 42.8% 12.1% 86.8% 6.1% 15.4% 74.5% 10.1% Source: PSCA 2016

Plan expenses Total plan cost by 401(k) plan assets
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures All plans >$1M to $10M 1.20% 1.24% 1.14% >$10M to $50M 0.90% 0.98% 0.86% >$50M to $100M 0.74% 0.65% >$100M to $250M 0.52% 0.57% 0.51% >$250M to $500M >$500M to $1B More than $1B Plan-weighted Participant-weighted Asset-weighted 0.97% 0.66% 0.47% 0.43% 0.44% 0.30% 0.55% 0.50% 0.27% 0.25% 0.39% 0.42% Total plan cost* as a percentage of assets among plans with audited 401(k) filings in the BrightScope database (by plan assets, 2014) * Total plan cost is BrightScope’s measure of the total cost of operating the 401(k) plan and includes asset-based investment management fees, asset-based administrative and advice fees, and other fees (including insurance charges) from the Form 5500 and audited financial statements of ERISA-covered 401(k) plans. Total plan cost is computed only for plans with sufficiently complete information. Note: The samples are 28,940 plans with $3.2 trillion in assets in BrightScope audited 401(k) filings generally include plans with 100 participants or more. Plans with fewer than four investment options, more than 100 investment options, or less than $1 million in plan assets are excluded from BrightScope audited 401(k) filings for this analysis. Sources: BrightScope Defined Contribution Plan Database and Lipper

Plan expenses Distribution of total plan cost by 401(k) plan assets
Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures All plans 10th percentile, median, and 90th percentile plan-weighted total plan cost1 as a percentage of assets among plans with audited 401(k) filings in the BrightScope database by plan assets, 2014 >$1M to $10M >$10M to $50M >$50M to $100M >$100M to $250M >$250M to $500M >$500M to $1B More than $1B 1.50% 1.71% 1.27% 0.92% 0.73% 0.67% 0.61% 0.51% 0.27% 0.47% 0.74% 0.58% 0.37% 0.23% 0.22% 0.14% 0.93% 1.13% 0.88% 0.66% 0.55% 0.49% 0.44% 1 Total plan cost is BrightScope’s measure of the total cost of operating the 401(k) plan and includes asset-based investment management fees, asset-based administrative and advice fees, and other fees (including insurance charges) from the Form 5500 and audited financial statements of ERISA-covered 401(k) plans. Total plan cost is computed only for plans with sufficiently complete information. Note: The sample is 28,940 plans with $3.2 trillion in assets. BrightScope audited 401(k) filings generally include plans with 100 participants or more. Plans with fewer than four investment options, more than 100 investment options, or less than $1 million in plan assets are excluded from BrightScope audited 401(k) filings for this analysis. Sources: BrightScope Defined Contribution Plan Database and Lipper

Plan expenses 401(k) mutual fund investors tend to pay lower-than-average expenses for equity mutual funds Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures Percentage of assets, 2000–2015 0.99% 1.60% 1.00% 0.95% 0.91% 0.88% 0.86% 0.83% 0.87% 0.79% 0.77% 0.74% 0.70% 0.68% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0.80% 0.82% 0.76% 0.73% 0.72% 0.66% 0.63% 0.58% 0.54% Industry simple average expense ratio Industry average expense ratio1 401(k) average expense ratio2 1.31% 0.53% 1 The industry average expense ratio is measured as an asset-weighted average. 2 The 401(k) average expense ratio is measured as a 401(k) asset-weighted average. Note: Data exclude mutual funds available as investment choices in variable annuities. Sources: Investment Company Institute and Lipper; see Collins et al. 2016

References Survey data presented in this booklet, representing the most recent information available, is taken from the following surveys: Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures The Profit Sharing Council of America’s 59th Annual Survey (“PSCA 2016”) This survey reports on the 2015 plan year experience of 592 plans with 8.8 million eligible employees and $785 billion in plan assets. The data is collected from plan sponsors invited to complete an online or hard-copy survey and represents a diverse array of plan sizes ranging from fewer than five participants to hundreds of thousands of participants. Company sizes, geographic locations, asset sizes and industries are quite diverse, as well. How America Saves 2016: A report on Vanguard 2015 defined contribution plan data. (“Vanguard 2016”) In this 15th edition of How America Saves, the anaylsis of DC plans and participant behavior is updated based on 2015 Vanguard recordkeeping data. The Vanguard data included in this report is drawn from various sources. All Defined Contribution clients universe consists of about qualified plans, 1500 clients, and more than 3.9 million participants for which Vanguard directly provides recordkeeping services. Unless otherwise noted, all references to "Vanguard" are to this universe and all data is as of December 31, 2015. The Brightscope/ICI Defined Contribution Plan Profile (“BrightScope Defined Contribution Plan Database and Lipper, Investment Company Institute and Lipper; see Collins et al. 2016, BrightScope Defined Contribution Plan Database”) The BrightScope/ICI Defined Contribution Plan Profile is a collaborative research effort between BrightScope and the Investment Company Institute that analyzes plan-level data gathered from audited Form 5500 filings of private-sector defined contribution (DC) plans, providing unique, new insights into private-sector DC plan design. The research draws from information collected in the BrightScope Defined Contribution Plan Database. The BrightScope/ICI Defined Contribution Plan Profile supplements existing plan sponsor surveys and research based on recordkept data, and it is designed to increase public understanding in this critical area of retirement savings. This report in the BrightScope/ICI Defined Contribution Plan Profile series focuses on private-sector 401(k) plans in This report first analyzes 401(k) plans in the Department of Labor 2014 Form 5500 Research File. Focus then shifts to nearly 30,000 audited 401(k) plans in the BrightScope Defined Contribution Plan Database, which have between four and 100 investment options, at least $1 million in plan assets, and typically 100 participants or more.

Disclosures BMO Global Asset Management is the brand name for various affiliated entities of BMO Financial Group that provide investment management, and trust and custody services. Certain of the products and services offered under the brand name BMO Global Asset Management are designed specifically for various categories of investors in a number of different countries and regions and may not be available to all investors. Products and services are only offered to such investors in those countries and regions in accordance with applicable laws and regulations. BMO Financial Group is a service mark of Bank of Montreal (BMO). BMO Global Asset Management is the brand name for BMO Investment Distributors, LLC. BMO Asset Management Corp. is the investment adviser to the BMO Funds. BMO Investment Distributors, LLC is the distributor of the BMO Funds. Member FINRA/SIPC. Investment products are: NOT FDIC INSURED — NO BANK GUARANTEE — MAY LOSE VALUE. © 2017 BMO Financial Corp. ( , 4/17) Eligibility and participation Automatic enrollment Employer contributions Participant account balances Investments Plan expenses References Disclosures

DC Conversations: An industry assessment of Defined Contribution Plans.

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DC Conversations: An industry assessment of Defined Contribution Plans.

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