Seventy-two percent of 403(b) plans offered target-date funds in 2011, up from 69.5% in 2010 and 51.2% in 2009, according to a new survey by the Plan Sponsor Council of America and Principal Financial Group.
The survey, the results of which were issued Tuesday, also found that 47.2% of 403(b) plans used target-date funds as QDIAs in 2011 vs. 34.2% in 2010 and 28.9% in 2009.
“Every year for the last five years, whether it’s been our survey of 403(b) plans or 401(k) plans, we’ve seen a growing trend toward target-date funds in plans,” David Wray, president of PSCA, said in an interview. “Like their 401(k) counterparts, 403(b) plan sponsors appear to believe that a target-date fund option is important for participants.”
Auto enrollment is also on the rise among 403(b) plans, with 14.9% offering it in 2011, up from 12.3% in 2010 and 11.5% in 2009.
“Automatic enrollment is a successful defined contribution strategy,” Mr. Wray said. “As with 401(k) plans, more 403(b) plan sponsors are in the process of adding that arrangement.”
The survey was conducted in March and April of executives at 584 403(b) plans. Among the respondents, 12.3% represented plans with 1,000 or more participants.