2019
Recordkeeping Survey

Five hot-button issues plan sponsors need to cover in provider searches.

Industry Snapshot

403(b) Plans Industry Snapshot

Although 403(b) plans and 401(k) plans have started looking increasingly similar in recent years, clear differences still remain. Most notably, the majority of 403(b) plans (74%) are exempt from requirements set forth by the Employee Retirement Income Security Act (ERISA), and some continue to offer multi-vendor environments, where a participant can choose from a number of recordkeepers to service his plan. Multi-vendor plans introduce additional compliance requirements that carry significant penalties if not met, meaning sponsors must understand how participant contributions are allocated and how providers share information across participant accounts. Conversely, sponsors can opt for a single-vendor plan, to consolidate and simplify plan administration.

Across the industry, service models have changed to align with specific subsegments of the market. Affluent industries such as higher education and health care—which represent 67% of 403(b) plan assets—often have different servicing needs than do the K–12 schools, churches and charities that make up the rest of the market. Investment lineups are also changing as more contemporary investment options displace the annuity contracts on which the industry was built. All of this change has fueled recent improvements in processes, systems and technology that have helped to modernize the plan sponsor and participant experience.

—BOK

Growth in Total 403(b) Plan Assets ($mm)

2010
$505,768
2011
$585,819
2012
$597,908
2013
$663,604
2014
$776,804
2015
$820,941
2016
$804,933
2017
$883,631
2018
$1,041,836
2019
$994,741

Share of Total Defined Contribution Market

Total defined
403(b) plan assets
$994,741
Total defined
403(b) plan plans
170,132
Total defined
403(b) plan participants
17,642,225
By Plan Size Assets ($mm)* Total* Participants*
<$5mm $84,566 151,137 12,736,205
$5mm – $25mm $111,005 10,512 2,718,133
>$25mm – $100mm $128,158 2,707 2,430,559
>$100mm – $500mm $220,794 1,037 3,415,672
>$500mm $386,206 281 4,651,476
† Not all providers report complete data; therefore, data segmented by plan size will not equal the corresponding overall total.