June 8, 2012 (PLANSPONSOR.com) – Five years after passage of 403(b) plan regulations, sponsors are now looking beyond the 403(b) quick fix.
Michael Levin, area vice president at Gallagher Retirement Services, told attendees at the 2012 PLANSPONSOR National Conference that 403(b) sponsors can use 401(k) plan strategies for improving plans and participant outcomes. To encourage participation for example, 403(b) sponsors should consider adding automatic enrollment and automatic deferral escalation. They can also add a contribution match program or change the match formula to encourage higher savings by participants.
Levin also suggests sponsors adopt an education policy statement which lists ways they plan to communicate to participants about saving and their 403(b) plans. It also notes how to measure the impact of education efforts. Levin says the statement should include some guidelines for communicating to different employee demographics, but should not be too specific.
Chris Cannova, director of compensation and benefits at the Archdiocese of Chicago, says his plan uses auto enrollment and auto deferral increase. In addition, the Archdiocese holds regular employee meetings and is now doing a pre-retirement seminar for employees, which covers the 403(b) plan, the Archdiocese’s frozen defined benefit (DB) plan and Social Security benefits for employees.
Cannova says his next step is to use targeted employee communications such as those that focus on different age groups.