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Nonprofits Prioritizing Financial Education, Wellness Tools Ahead of 2023

Industry Trends and Research

As the rising cost of living is beginning to affect participants’ ability to save, nonprofits are moving proactively to provide support, prioritize financial wellness tools and resources, and enhance participant education, according to the latest survey of 403(b) plans from the Plan Sponsor Council of America (PSCA), part of the American Retirement Association.

The survey of more than 100 nonprofits, sponsored by Principal Financial Group, found nearly 20% of plan sponsors are seeing a decrease in deferral rates, following a record high rate of saving (6.9% of pay) in 2021 reported in the PSCA 2022 403(b) Plan Survey released in September. This tracks with US Bureau of Economic Analysis data showing a dramatic decrease in personal savings rates amid inflation after record savings rates during the pandemic. Additionally, nearly 20% of respondents are already providing education on saving in a market downturn and 15% are providing education specific to inflation.   

“Clearly, some participants are more impacted by the economy than others and we may well continue to see a decline in deferral rates into next year if energy, healthcare, and food costs continue to increase,” said Hattie Greenan, director of research and communications at PSCA. “The fact that savings rates were at record highs in 2021 may buffer account balances a bit as participants direct current pay towards higher living costs.”


Though compliance remains a top priority for 403(b) plan sponsors (indicated by 55% of respondents this year), providing financial wellness tools and resources to participants has leapt to a close second with more than half now citing it as one of the top three plan priorities for next year, up from 40% in 2021. This tracks with data from the annual 403(b) survey released in September that reported a 37% year-over-year increase in plans offering financial wellness programs to employees.

While increasing participation and deferral rates are still among the top five priorities, their importance has dropped significantly in favor of an emphasis on compliance and financial wellness programs—perhaps in recognition of where employees’ priorities lie during an economic downturn.

“To see nonprofits placing a greater emphasis on providing financial wellness and enhancing education suggests they are taking a proactive approach to support their employees during this period of increased market and economic volatility. It’s important to address concerns that often lead to diminished savings and heightened stress for workers, and we’re committed to helping organizations identify the most appropriate services for their plans,” said Kevin Morris, vice president and chief marketing officer, Retirement & Income Solution at Principal.


The survey also asked plan sponsors how they have responded to the DOL guidance regarding cybersecurity as a fiduciary responsibility—42% are relying on vendor System and Organization Controls (SOC) reports regarding cybersecurity while 20% are reviewing it internally or hiring an outside vendor to audit. A quarter of respondents were either unsure or unaware of the guidance. However, two-thirds of respondents said they have a cybersecurity liability insurance policy. 

The survey was conducted online in October 2022 and received responses from 108 403(b) plan sponsors. The full report is available here.