PSNC 2011: Best Practices for 403(b) Plans
June 24, 2011 (PLANSPONSOR.com) – At the recent PLANSPONSOR National Conference, 403(b) plan sponsors heard what some peers are doing to best manage and administer their 403(b) programs.
Laurie Clemens, Director of Human Resources for Heritage Valley Health System, PLANSPONSOR’s 2011 Non-profit/403(b) Plan Sponsor of the Year (see 2011 Plan Sponsor of the Year: Heritage Valley Health System), discussed the massive education campaign that moved the System’s plan from a 53% participation rate to 82% in just four years. Clemens recommended partnering with plan providers and/or the adviser on education efforts and plan design.
Chris Cannova, Director of Compensation & Benefits, Archdiocese of Chicago, adds that plan sponsors should make sure their providers and adviser know their business, not just the 403(b) market, but the particular market segment the sponsor is in.
Concerning plan design, Clemens, as well as Cannova, are advocates for automatic enrollment as a tool for increasing employee participation in their programs.
Jim Phillips, President of advisory firm Retirement Resources, provided conference attendees with a Best Practices checklist. He suggests starting with the basics, not only a mission statement for the plan, but identifying who are fiduciaries to the plan and what are their duties.
According to Phillips, plan sponsors should also take inventory of their providers, what services they are offering and how they are paid, and whether current plan features meet the needs of the company and employees. Sponsors should also look at what capabilities their provider has that the plan is not using, and whether the current investment menu is suitable for employee demographics. Finally, when taking inventory, 403(b) plan sponsors should assess the state of retirement readiness of plan participants.
After taking inventory, Phillips said, plan sponsors should honestly answer the questions, “Is our retirement plan successful,” and “Are there any changes that would likely improve results?”
Audio of the panel discussion will soon be available at http://www.plansponsor.com/Multimedia.aspx.