2013 403(b) Plan Survey - Highlights of Results
- 76.3 percent of respondent plans are ERISA, 16.4 percent are non-ERISA, and 7.3 percent of respondents were unsure of their plan’s ERISA status.
- 34.3 percent of organizations offer more than one type of retirement plan to essentially the same group of employees.
- 85.3 percent of employees at respondent organizations are eligible to participate in their organization’s 403(b) plan.
- 51.9 percent of organizations allow all employee groups to participate in the plan, while 48.1 percent restrict it to specific categories of employees only.
- Nearly 30 percent of plans allow eligible employees to receive matching contributions immediately, while more than half require a year or more of service.
- An average of 77.4 percent of eligible active employees have a balance in the plan.
- An average of 66.2 percent of eligible employees made contributions to the plan in 2012.
- 23.8 percent of plans permit Roth after-tax contributions
- 82.3 percent of organizations make contributions to the plan. 40.9 percent make matching contributions only, 25.0 percent make non-matching contributions only, and 16.4 percent make both matching and non-matching contributions to the plan.
- Organization matching formulas average a maximum of 4.7 percent of participant’s pay (when eligibility and other conditions are met), while the average maximum non-matching contribution to the plan is 6.1 percent of pay.
- 65.3 percent of plans provide immediate vesting for non-matching contributions, and 62.7 percent of plans provide immediate vesting for matching contributions.
- Plans offer an average of 27 funds for organization contributions and an average of 31 funds for participant contributions.
- 50.0 percent of plans have both annuities and custodial accounts invested in mutual funds and/or ETFs.
- 73.6 percent of plans offer target-date funds as an investment option.
- 52.8 percent of respondents have an investment policy statement. 24.1 percent of plans are unsure if their plan has such a statement, down from 28.3 percent of plans in 2011 and 34.6 percent in 2010.
- Investments are most often monitored annually (48.2 percent of plans).
- 46.0 percent of organizations retain an independent investment advisor to assist with fiduciary responsibility.
- 24.4 percent of organizations offer investment advice to participants. An average of 23.0 percent of participants utilized investment advice when it was offered.
- 14.6 percent of organizations have an automatic enrollment feature. Automatic enrollment is more prevalent for large plans (29.1 percent of plans with 1,000 or more participants).
- The most common default investment options are target-date funds (56.0 percent of plans), followed by lifestyle funds (24.0 percent of plans).
- 69.0 percent of plans allow participants to borrow against their plan assets.
- An average of 11.6 percent of participants have a loan outstanding, when permitted, with an average loan balance of $5,987.
- 75.7 percent of plans allow participants to take hardship withdrawals
- 1.2 percent of plan participants took a hardship withdrawal in 2012 when permitted, down from 1.6 percent in 2011 and 2010.
Participant Education and Communication
- The most common educational approaches are enrollment kits (85.3 percent of organizations), e-mail (70.7 percent), Intranet/Internet sites (58.9 percent), and one-on-one meetings with the plan provider (54.2 percent).
- 82.7 percent of plans file a Form 5500. 50.2 percent of plans had a CPA audit in 2012.
- The IRS has audited 6.6 percent of plans in the past.
- 15.7 percent of organizations are re-evaluating the allocation of plan-related expenses.
- 69.5 percent of organizations evaluate plan-paid fees annually.
- 1.9 percent of plans state that they never review the fees, down from 5.9 percent in 2011.
Plan Administration Practices
- 75.5 percent of organizations monitor at least one participant behavior.
- 32.2 percent of organizations use a third-party administrator as their primary recordkeeper, and 26.1 percent use an insurance company.
- 82.6 percent of organizations use one plan provider, and 9.2 percent use two
- 22.6 percent of organizations made changes to their plan within the last year.