June 29, 2012 (PLANSPONSOR.com) - Silvia Frank, program manager at Trinity Health, says 403(b) plan sponsors should share experiences and support each other in creating the best program for participants.
The Plan Sponsor Council of America’s 2012 403(b) Plan Survey webinar addressed lessons that can be learned from the experiences of those sponsors responding to the survey. One quarter of 403(b) plan sponsors indicated they made changes to their plans in the past year, which PSCA president David Wray said is a very positive sign that companies are continuing to improve their plans.
The survey results, released last month (see "403(b)s Show Culture of Continuous Improvement"), show the primary improvements 403(b) plan sponsors made were to investment lineup (39.3%), plan design features (23%) and employer or participant contribution arrangements (24%). Aaron Friedman, national non-profit practice leader at The Principal, which sponsored the survey, said this offers an opportunity for advisers and consultants, as it means plan sponsors still need help.
Wray noted that over time, the number of eligible participants has been steady around 84%, and the number of participants with an account balance has increased to 75%. Sixty-four percent of participants made contributions to their plans in the past year, which is good news because participants have continued participation and contribution during volatility of the market.
However, Friedman cautioned that having an account balance does not necessarily mean it will be adequate in retirement, so sponsors must continue to encourage employees to save. Frank added the stats show an opportunity for plan sponsors to focus communication efforts on plan participation.