Higher education institutions are streamlining their retirement plans to reduce costs and simplify the administrative burden, according to Transamerica Retirement Solutions.
In its report, "Retirement Plans for Institutions for Higher Education," Transamerica found that the number of plans using a single plan provider has increased dramatically to 52 percent from a decade ago when only a handful stuck to just one provider. The majority of higher education institutions used multiple plan providers back then.
Plan contracts are shifting to a consolidated structure, with many higher education institutions moving from individual to group contracts. According to Transamerica, 31 percent of them offer only individual contracts and almost as many have completely abandoned individual contracts.
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The institutions also are reducing plan investment options. In the past, they used to offer nearly unlimited options, which gave employees too many choices. Now, staff and faculty can access an average of 21 investment options. This move was driven by Internal Revenue Service regulations that established an oversight requirement for ERISA 403(b) plans in 2009.
Transamerica Retirement Solutions provides customized retirement plan solutions for small to large organizations.
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