Findings from the 2010 403(b) Plan Survey by the Profit Sharing/401k Council of America (PSCA) show despite a recession and complex new regulations, the 403(b) retirement plan system appears to be "healthier than ever."
Sponsored by the Principal Financial Group, the study shows that nearly 57 percent of plan sponsors made changes to their 403(b) plans because of new regulations. That is a higher percentage than had planned to make changes (41 percent), according to the 2008 403(b) Plan Survey.
The survey also revealed that the overall participation rate for employees eligible to participate in a 403(b) plan remained unchanged from the 2008 survey (75.8 percent).
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"This year's 403(b) Plan Survey proves the resilience of the 403(b) system," says David Wray, president of PSCA. "Pre-crash to post-crash, pre-regs to post-regs, 403(b) plan sponsors and participants clearly remain committed to this important employee benefit."
The 2010 403(b) Plan Survey–part of an ongoing series of PSCA surveys on 403(b) plans–reports on the 2009 plan-year experience of 552 plan sponsors from across the country. This represents a 43 percent increase in the number of respondents from the 2008 403(b) Plan Survey.
"The objective of the PSCA 403(b) Plan Survey is to provide much-needed benchmarking data for 403(b) plan sponsors as they develop and maintain their plans. This year's significant increase in respondents shows that the survey is becoming a trusted, credible benchmarking source for the 403(b) market," says Aaron Friedman, national practice leader–nonprofit, The Principal.
The survey also revealed:
- An increase in the number of plans permitting Roth after-tax contributions (13.9 percent in 2009, up from 10.9 percent in 2007).
- Few participants (1.3 percent) took hardship withdrawals in 2009 even though 76 percent of plans permit them.
- Fewer small companies made changes as a result of the new rules than large companies (just over 48 percent of plans with 1 to 49 employees made changes versus nearly 70 percent of plans with 200 or more employees).
- One-third of respondents are unsure if their plan has an investment policy statement.
For a summary of the results and to order a copy of the full report, visit www.psca.org.
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