Many 403(b) plan sponsors actively recognize their responsibility for encouraging participants to save for their retirement, but there is room for improvement, according to a new Plan Sponsor Council of America study, “Attitudes Towards Retirement Readiness in 403(b) Plans.”
The report, which reflects responses from 381 non-profits that currently sponsor a 403(b) plan, found appreciation among those plan sponsors for their role: half of them are concerned about employees saving enough for retirement, and one-quarter say they know they need to do more to support saving. Only 10% think they have fulfilled their responsibility simply by offering a 403(b).
Still, the report suggests there is room for improvement:
- 47.9% said they consider automatic enrollment a way to improve participants' retirement outcomes, but just 27% said auto enrollment is part of their plan
- 35% encourage their employees to save, but say that they don’t want to “force it”
- 27% feel they have a responsibility to encourage savings and are taking measures to do so
- 23.2% offer a financial wellness program that includes the retirement plan as well as education on financial planning, saving for college, debt management and health care
- 15.8% target their plan education materials to specific age segments
- 10.6% are monitoring potential participant outcomes by providing their participants with access to modeling and income-stream projections offered through the plan service provider.
“We continue to see 403(b) plan sponsors make progress in building better retirement programs, and encouragement and education are key factors in helping participants create positive outcomes, PSCA Executive Director Bob Benish said in a press release. “It’s crucial to be able to see the whole picture when it comes to financial wellness.”
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