ERISA 403(b) Employer Contributions More Than Doubled From 2009 to 2023

Among 403(b) plans subject to the Employee Retirement Income Security Act, employer contributions in 2023 totaled $13 billion, up from $11 billion in 2021 and 2.5 times the amount made in 2009, according to a new report.

Data were collected and analyzed in the Investment Company Institute and ISS Market Intelligence’s “The ICI/ISS MI Defined Contribution Plan Profile: A Close Look at ERISA 403(b) Plans, 2023.” ISS MI, like PLANSPONSOR, is owned by ISS STOXX.

The same review found that total plan costs for large ERISA 403(b) plans, defined as those with at least 100 participants, declined across every group of plans, as broken down by assets, from 2009 through 2023, according to the report. The average participant was in a plan with a total cost of 0.45% of assets in 2023, down from 0.68% in 2009, while the average dollar was invested in a plan with a total cost of 0.37%, down from 0.59% over the same period. The fees reviewed included administrative, advice and other costs reported in Form 5500 filings, as well as the reported asset-based investment management fees.

Steven Bass, an economist of retirement and investor research at ICI, says employer contributions have helped fuel the growth in the 403(b) market—what he calls just one part of an employer’s “compensation basket.” He says employer contributions, though only one factor, are substantial, representing about one-third of total annual contributions.

ICI Chief Economist Shelly Antoniewicz adds that employers making their contributions part of an employees’ “whole compensation package” is a reflection of the “competitive pressure” they feel when attempting to attract and retain talent.

The ICI recently reported that 403(b) plans held $1.6 trillion in assets as of the second quarter of 2026, up from $1 trillion in 2018. In 2023, ERISA 403(b) plans held 59% of a total of $1.3 trillion 403(b) plan assets. Large employers represented 94% of all ERISA 403(b) plan assets.

According to the 2026 PLANSPONSOR 403(b) Market Survey, the five largest 403(b) ERISA plans by assets were recordkept by TIAA ($14.260 billion), Ascensus ($3.753 billion), the Vanguard Group Inc. ($3.120 billion), Voya Financial ($2.660 billion) and Empower Retirement LLC ($2.463 billion).

Among all plan sponsors that responded to the 2026 PLANSPONSOR Plan Benchmarking Report, 8.1% said their organizations offered 403(b) plans. Of 403(b) plan sponsors, 38.8% said their 403(b) plan was subject to ERISA.

Employer Contribution Breakdown

In 2023, 87% of large ERISA 403(b) plans, covering more than 75% of large ERISA 403(b) plan participants, offered employer contributions—an increase from 71% in 2009, according to the ICI/ISS MI report.

“Simple” matching formulas, in which the employer matches a certain percentage of employee contributions up to a maximum share of an employee’s salary, were the most common type of employer contribution. Among large ERISA 403(b) plans with employer contributions, 36% utilized automatic employer contributions, made without regard for employee contributions, 51% used simple matches, and 11% implemented both. Just under 40% had a simple match only, and 25% had automatic contributions but no simple match. The remaining share had tiered matches, in which various levels of employee contributions are matched at different rates, and other types of employer contributions.

Large plans with automatic enrollment were more likely to have both employer contributions and participant loans outstanding than plans without automatic enrollment. In 2023, 74% of large ERISA 403(b) plans with automatic enrollment also had both employer contributions and participant loans outstanding, compared with 65% of plans without automatic enrollment.

Investment Options

In 2023, the average large ERISA 403(b) plan offered 27 core investment options—of those, about 11 were equity funds, 11 were part of a target-date fund series, and two were bond funds. The remaining funds options were comprised of non-target-date balanced funds, international bond funds, money funds, fixed annuities and other funds categories.

Some 40% of large ERISA 403(b) plan assets were invested in equity funds, 35% were in balanced funds—most of which were part of target-date funds—and 5% were held in bond funds. Fixed annuities, offered by 83% of large ERISA 403(b) plans, accounted for 14% of ERISA 403(b) plan assets. The remaining assets were held in money funds and other fund categories, including commodity and real estate funds.

The report contained a disclaimer that not all dollars and percentages add up to totals due to rounding.

TDFs have become more common investments in large ERISA plans since 2009, according to the report. In 2009, about half of large ERISA 403(b) plans included TDFs in their investment lineups, but that has risen to 90% of plans in 2023. Similarly, although less dramatic, the proportion of participants who were offered core TDFs rose to 90% in 2023 from 71% in 2009. Over the same period, the share of assets invested in TDFs increased to 34% from 7%.

Mutual funds were the most common investment vehicle in large ERISA 403(b) plans in 2023, with 70% of large ERISA 403(b) plan assets invested in the funds. Variable annuities held 15% of assets, and fixed annuities held 14%.

Index funds were widely available in large ERISA 403(b) plans in 2023 and represented 42% of those plans’ assets. Index funds held the greatest share of assets in the largest 403(b) plans: 49% of assets of ERISA 403(b) plans with more than $1 billion in plan assets were invested in index funds, which generally have lower expense ratios than actively managed equity funds, according to the report.

Data in the report were based on 5,332 ERISA 403(b) plans with at least 100 participants that filed Department of Labor Form 5500s for plan year 2023.

The 2026 PLANSPONSOR Plan Benchmarking Report was based on the 2025 PLANSPONSOR Defined Contribution Survey, fielded in mid-2025. The results incorporated the responses of 4,387 plan sponsors.

The 2026 PLANSPONSOR 403(b) Survey was fielded in mid-2026 among 31 recordkeepers of 403(b) defined contribution plans, based on their 403(b) recordkeeping business as of December 31, 2025.