Based on a new Profit Sharing/401k Council of America survey, 403(b) plan sponsors took significant steps toward managing their plans for the last three years, even in this down economy and new regulations.
Seventy-three percent of 403(b) are unchanged regarding employer contributions to their plans, and 40 percent of those that suspended matches are reinstating them, finds the survey, which is sponsored by the Principal Financial Group.
"We saw real stability in the midst of volatility as 403(b) plans began restoring employer matches at the same rates as 401(k) plans," says David Wray, PSCA president. "We also saw a significant increase in employee education as 403(b) sponsors helped employees focus on rebuilding. That may explain why these plans also report increased participation."
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Some key survey findings include:
- Thirty-eight percent of respondents report increased participation rates.
- More than half, 50.8 percent, of respondents increased employee education as well as communication over the past year.
- Almost a quarter, 22.6 percent, added investment advice.
- In the next six months, nearly 16 percent of 403(b) plans that suspended the match anticipate restoring it.
"Clearly, these 403(b) plan sponsors have shown resilience over these recent tumultuous years," says Aaron Friedman, national non-profit practice leader, The Principal. "The survey shows that 403(b) plans appear to have adapted remarkably well to challenging economic times and major regulatory change."
Full survey results can be viewed at www.psca.org.
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