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Nearly three-fourths (73.4%) of 403(b) plan sponsors said in a recent poll that they did not change their employer match during the 2008-2009 plan year—and that seems to have shored up participation as well. A news release said the poll, from the Profit Sharing/401k Council of America (PSCA), also found that 43% of plan sponsors surveyed say they increased employee education because of the economic conditions. Another 17% added investment advice for employees. The Principal Financial Group sponsored the study. According to the news release, only 16.6% of plan sponsor respondents reported a decrease in plan participation during 2008-2009, and just 16.9% experienced a drop in employee deferrals. However, participation did suffer among those organizations that suspended their matching contribution. More than 50% of organizations that suspended their match reported a decrease in plan participation compared with only 12% of organizations that did not make changes to the match. The survey found that, among 403(b) plan sponsors who did reduce their matching contribution, a full 23.5% plan to reinstate the match during the next six months. Among 401(k) plan sponsors who reduced the match, 41.3% will restore the match during the next six months. Smaller organizations were more likely to report reducing or suspending their non-matching contributions, while larger organizations were more likely to reduce or suspend their matching contributions. Finally, the survey found 13.3% of 403(b) plan sponsors are unsure of their ERISA status. The PSCA poll covered 609 403(b) plan sponsors from across the country.
Nearly three-fourths (73.4%) of 403(b) plan sponsors said in a recent poll that they did not change their employer match during the 2008-2009 plan year—and that seems to have shored up participation as well. A news release said the poll, from the Profit Sharing/401k Council of America (PSCA), also found that 43% of plan sponsors surveyed say they increased employee education because of the economic conditions. Another 17% added investment advice for employees. The Principal Financial Group sponsored the study.
According to the news release, only 16.6% of plan sponsor respondents reported a decrease in plan participation during 2008-2009, and just 16.9% experienced a drop in employee deferrals. However, participation did suffer among those organizations that suspended their matching contribution. More than 50% of organizations that suspended their match reported a decrease in plan participation compared with only 12% of organizations that did not make changes to the match.
The survey found that, among 403(b) plan sponsors who did reduce their matching contribution, a full 23.5% plan to reinstate the match during the next six months. Among 401(k) plan sponsors who reduced the match, 41.3% will restore the match during the next six months.
Smaller organizations were more likely to report reducing or suspending their non-matching contributions, while larger organizations were more likely to reduce or suspend their matching contributions.
Finally, the survey found 13.3% of 403(b) plan sponsors are unsure of their ERISA status. The PSCA poll covered 609 403(b) plan sponsors from across the country.
Fred Schneyereditors@plansponsor.com
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