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Practice Management

Best Practices Concerning Multiple 403(b) Providers

Q. We are considering having multiple 403(b) providers for our district. What are some best practices we can follow? 

A. Edward Kenney and Tali Yarmush of Equitable, with Equitable Research partner Zeldis Research Associates, in “Benefits of multiple 403(b) Providers: Having a Choice Positively Affects Participant Behaviors,” suggest a variety of steps school districts can take if they decide to make multiple 403(b) providers available. 

  • Remember that: 
    • Having just one provider entails challenges, such as a heavier burden in tracking legacy accounts, tracking hardship distributions and loans, and heavier fiduciary obligations—as well as risks.
    • Outside vendors offer support in communications, compliance, financial transactions and recordkeeping.
  • Maintain a single plan document, even when there are multiple plan providers. 
  • Cooperate with providers to ensure the appropriate products and providers are available to teachers. Furthermore, Kenney and Yarmush suggest adopting a uniform and product-neutral retirement education program for teachers.