May 22, 2012 (PLANSPONSOR.com) - Sponsors of 403(b) retirement plans continue to adapt to regulations from the Department of Labor (DOL) and continue to make improvements.
The latest 403(b) plan sponsor survey from the Plan Sponsor Council of America (PSCA), sponsored by the Principal Financial Group, shows more stability and less uncertainty among 403(b) plan sponsors. The percent of plan sponsors who do not know their Employee Retirement Income Security Act (ERISA) status decreased from 10% in 2010 to 6.8% in 2011. Twenty-percent fewer sponsors are uncertain over whether they have an investment policy statement.
“The engagement of 403(b) plan sponsors is much higher than in years past. They’re adjusting to the new regulatory environment, and show a much better understanding of ERISA,” said David Wray, president of PSCA.
Greater use of target-date funds continues, with 72.5% of plan sponsors offering target-date funds as an investment option, versus 69.1% in 2010. The number of plans permitting Roth after-tax contributions has doubled in the past four years. In 2011, 21.7% of 403(b) plans allowed Roth, up from 16.9% in 2010 and 10.9% in 2007.