"Many nonprofit organizations rely heavily on 403(b) plans — instead of salaries — to compete for the best employees," said Bob Benish, executive director of PSCA. "We've seen 403(b) plans improve dramatically over recent years. It is clear those plans will be increasingly important in the race for high performers, especially in higher educational institutions."

Along with recruiting challenges, the survey found that the top challenges facing plan sponsors include an increased need for training, skill gaps in the workforce, the reallocation of responsibilities causing a burden on remaining employees and increased use of technology.

While seven out of 10 plan sponsors believe planning for retirement is the employees' responsibility, two-thirds (66.8 percent) provide retirement planning education, including nearly 90 percent of large organizations.

"403(b) sponsors recognize the need to both encourage employees to accept responsibility to prepare for their own retirement and at the same time help them prepare for the transition," said Benish. "That is important because while employees generally expect to work into their 60s, studies consistently show many end up retiring before they planned, often due to health reasons."

The Plan Sponsor Council of America is a national nonprofit association of 1,200 companies and their employees, which advocates increased retirement security through profit sharing, 401(k) and related defined contribution programs to federal policymakers.