Fulfilling responsibilities and increasing participation and deferral rates are the top priorities of 403(b) plan sponsors for 2020, the Plan Sponsor Council of America (PSCA) finds in a new survey.
Survey respondents’ top five priorities were:
|
Priority |
Percentage Naming it Top Priority |
|
Compliance and reducing fiduciary liability |
54% |
|
Increasing participation |
43% |
|
Increasing deferral rate |
42% |
|
Adding financial wellness programs |
32% |
|
Reducing plan costs |
24% |
Only 5% of survey respondents told the PSCA that cybersecurity is a priority for them in 2020. The PSCA takes this as an indication that 403(b) plan sponsors “do not yet see it as a part of their fiduciary responsibility.”
How do plan sponsors plan to achieve these objectives? Here’s a look at what they plan to do:
|
Priority |
Way to Achieve it |
Percentage Using Means to Meet Goal |
|
Increasing participation and deferral rates |
Increasing targeted education |
75%+ |
|
Reducing plan costs |
Changing to lower-cost investment funds |
70% |
|
Increasing participant outcomes and retirement readiness |
Making plan design changes |
30%+ |
Plan Changes
Forty percent told the PSCA that they plan to make changes to their plans in 2020. The top three are changing the number of investment options, adding automatic enrollment and adding a Roth option.
The PSCA adds that interest in such changes to plans was “consistent across organization size.” This, it says, “signals a shift, along with the interest in offering financial wellness programs, from getting participants in the plan, to ensuring they are saving enough to have a comfortable retirement.”
About the Survey
Nearly 300 403(b) plan sponsors responded to the survey. Two-thirds are ERISA plans; nearly a quarter are not subject to ERISA; and fewer than 10% of respondents were unsure of their ERISA status. One-third of respondents have fewer than 50 participants, while about 20% have more than 1,000. Respondents hailed from a wide range of industries, including social and community services organizations, institutions of higher education and K-12 education, and religious institutions.
