More than 96% of 403(b) plan sponsors contribute to their plans, up 13.9 percentage points from 2013, said Plan Sponsor Council of America’s annual survey released Thursday.
“That’s a significant increase over last year,” said Aaron Friedman, national tax-exempt leader for Principal Financial Group, which sponsored the PSCA survey that covered 478 non-profit retirement plans.
Mr. Friedman attributed the increase to a growing economy and people’s improved confidence in the economy.
That number may also have been impacted by plan sponsors consolidating to a single program for employee and employer contributions rather than offering multiple plans.
On the flip side, participants contributed on average 6% of their annual pay to their plan, up from 5.8% in 2013, the survey found.
Likewise, the average account balance grew 14.5% to $62,513 in 2014.
Other plan features remained relatively unchanged year-over-year. Only 16.2% of plans surveyed offered automatic enrollment in 2014, up slightly from 16% in 2013 but far below 401(k) plans, which sits at roughly 50%. That being said, 20.3% of 403(b) plans with automatic enrollment reported using a default contribution rate of 5% or more of salary in 2014 compared with 16.9% of plans in 2013, and 38.3% offered automatic escalation compared with 20.7% in 2013.
Other key findings from the survey include:
- Nearly half (46.7%) of plan sponsors use independent investment advisers to help with fiduciary responsibilities, down from 51.3% in 2013;
- The number of plans offering Roth after-tax contributions has more than doubled in the last five years, with 25.2% of plans permitting Roth contributions in 2014;
- 82.3% of plans use one plan provider vs. 80.1% in 2013; and
- Half of the plans surveyed made no plan changes (investment lineup or otherwise) in 2014 and 43.2% don’t anticipate making changes in 2015.