NTSA Summit: Education Market in Transformation

The education sector of the retirement plan market is in a period of marked transformation, and an expert panel in a June 28 session of the 2021 NTSA Summit offered their insights on these trends and what they mean. 

David Lewis, Executive Director of the Association of School Business Officials (ASBO) International, moderated a panel discussion featuring ASBO state executive directors Sharon Bruce (Connecticut), Margaret Driscoll (Massachusetts), Tracey Ginsburg (Texas) and Susan Young (New Jersey).

The New Environment

School administrators today have even more responsibility, Driscoll observed. They now handle the “before” rather than just the “after” of transactions and are now more public-facing. In addition, there is no particular deadline for starting a 403(b) plan; consequently, given all those factors it’s harder for school administrators to build discussions about 403(b)s into their schedule, she said. 

Another complicating factor are the rules at various facilities governing contact with school officials. “It’s important to be aware of the rules at facilities and different institutions” regarding opening their process to industry professionals, said Ginsburg. In addition, remarked Lewis, there can be “incredible differences” between schools and school districts within a state. 

One thing that has not changed is the discussion of the merits of having a single vendor as opposed to multiple vendors. Young expressed the view that most districts don’t want a single 403(b) vendor. When there is a single vendor, she said, it can happen for a variety of reasons:

• school district policy;
• union contract; 
• departure of a vendor that causes a business official to have to scramble to handle the accounts; and 
• so much paperwork involved in establishing relationships with additional vendors that it discourages having multiple vendors.

Meeting Current Challenges

With school officials juggling many priorities, it is harder for them to prioritize with 403(b)s, said Bruce; in addition, she remarked, many school officials are not familiar with 403(b)s. The answer, she said, is gaining their trust by building a relationship with them. “Try to understand what business managers are facing,” she suggested. 

Bruce continued that she believes that school officials “see the value of increasing participation” by employees in retirement plans. In Connecticut, she said, ASBO meets regularly with business leaders to address this issue and works with them to hold regional meetings. In addition, they have created documents about plans “so the school districts don’t have to start from scratch”; they have templates but customize them for individual districts. 

Looking Ahead

Panelists noted that schools are opening up again for in-person instruction. Still, said Lewis, it is “very, very important to understand” that educators are dealing with a very unusual situation. 

Ginsburg also sounded a note of caution regarding contact with school officials. She said that in Texas they are “hoping our members will be respectful of the amount of work educators will have in this coming year.” Still, she said, “we can’t let educators ignore their retirement.” 

The key, Ginsburg suggested, it so educate the educators’ bosses and to “be a partner, not a salesperson.”