The vast majority (83.6%) of non-profit organizations with 403(b) plans are not changing their contribution levels despite the financial pressures of the COVID-19 pandemic, according to a new Plan Sponsor Council of America (PSCA) snapshot survey, sponsored by Principal Financial Group®.
While the vast majority of organizations are not planning on changing their employer contribution levels this year, nearly a third of higher education institutions say they either have, or will by year-end, reduce or suspend contributions to their 403(b) plans.
Ten percent of all respondents have suspended or reduced the matching contribution and 7.5% have suspended or reduced the non-matching contribution (some plans have both types of contributions).
Loans and Withdrawals
Similarly, while three-fourths of plans indicated they have not noted an increase in plan loan activity since the beginning of COVID-19, just over a third (36.0%) of hospitals and health care organizations noted an increase, as did nearly 30% of higher education institutions. However, those sectors were a relatively small sampling of the overall survey.
While more than 70% of organizations reported no change in the volume of hardship and in-service withdrawals this year, more than half (52.2%) of hospital and health care systems did cite an increase in participants tapping their accounts. More than a third of higher education institutions also noted an increase.
The full report is available for download at https://www.psca.org/research/403b/2020snapshot.
