Sponsors of 403(b) plans are more apt to offer a broad range of services and options, according to a study of defined contribution (DC) plans The 2013 Plansponsor Defined Contribution Survey found that 403(b) plan sponsors in many ways are more generous than their other DC plan counterparts.
The following results illustrate the differences between sponsors of 403(b)s and those of DC plans overall.
- 82.7 percent of 403(b) plan sponsors believe it is important to provide retirement income solutions, while 78 percent of DC plan sponsors overall do;
- for 83.5 percent of 403(b) plan sponsors the investment policy statement covers target-date funds and their underlying investments, while that is the case for 62.5 percent of DC plan sponsors do;
- 83 percent of 403(b) plan sponsors allow systematic withdrawals at retirement, whereas 62.3 percent of DC plan sponsors do;
- 75 percent of 403(b) plan sponsors make their employees eligible to participate at hiring, while that is the case for 37.6 percent of DC plan sponsors;
- 35 percent of 403(b) plan sponsors offer their employees 100% vesting of the employer match between six months and three years, while that is the case for 23.8 percent of DC plan sponsors
- 15.3 percent of 403(b) plan sponsors make their employees eligible to participate six months after hiring, while that is the case for 28.6 percent of DC plan sponsors; and
- for 15.4 percent of 403(b) plan sponsors, the employer match is more than 100 percent of the first 6% of deferrals, while that is the case for 7.6 percent of DC plan sponsors.
The report is based on a survey of more than 5,300 U.S. DC plans conducted late in 2013.
John Iekel is Senior Writer at ASPPA, as well as Editor of the ASPPA Net and NTSA Net web portals.
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