Sibson Consulting’s College & University Benefits Study (CUBS) found all private institutions offer a DC plan, and 96% of public institutions offer one. Institutions’ median contribution to their DC retiree income plans was 10% of compensation, which is more than three times greater than the median seen in the corporate sector.
Sibson said since the Internal Revenue Service released final regulations for Section 403(b) plans in 2007, there has been a shift toward including a “best-in-class” menu of investment options as a replacement for, or in addition to, a broader universe of funds. Additionally, there has been a significant movement to consolidate vendors for administration.
When consolidating vendors, institutions often add a brokerage account to give faculty and staff access to almost any mutual fund in order to mitigate the misperception that vendor consolidation is a reduction in choice. CUBS found nearly three-quarters of institutions have only one or two DC plan vendors.
The study also found types of retiree health benefits offered to employees of public and private institutions differ. For example, public institutions are more likely than private institutions to offer retiree health benefits to new hires (87% vs. 66%), and private institutions are more likely than public institutions to offer an account-based defined contribution (DC) retiree health plan to new hires (29% vs. 7%).
Educating faculty and staff about cost-effective use of their health benefits is an important part of institutions’ 2013 health strategy with a majority of institutions indicating that this is a major initiative.
Wellness is a clear priority, with 55% of the institutions in the study offering weight-loss programs, tobacco-cessation programs, flu shots and health-risk assessments. Seventy-three percent allow employees to use the campus fitness center.
The complete study report can be downloaded from http://www.sibson.com/publications-and-resources/surveys-studies/?id=2405.