Non-Profits Prioritize Retirement Plan Compliance and Financial Wellness of Employees In 2020
December 16, 2019 at 12:00 PM EST
Non-profit organizations with 403(b) retirement plans will prioritize employee retirement readiness, financial wellness and regulatory compliance heading into 2020, according to a new Plan Sponsor Council of America (PSCA) survey, sponsored by Principal Financial Group®.
“At a time of increased legislative activity and high-visibility litigation targeting some 403(b) plans, plan sponsors have responded with a renewed commitment to compliance and an enhanced focus on the role of the fiduciary,” said Hattie Greenan, director of research and communications at PSCA. “At the same time, it is noteworthy that non-profit employers are continuing to focus on improving participant outcomes by helping them more effectively take advantage of their workplace retirement plan.”
The PSCA report surveyed nearly 300 403(b) plan sponsors to illustrate how these organizations approach retirement plan management. In addition to retirement readiness, sponsors are adapting to recent changes in the regulatory environment.
“Plan sponsors can play a powerful role in helping their employees prepare for lifelong financial security,” said Luke Vandermillen, vice president of retirement and income solutions at Principal®. “It’s encouraging to see employers increasingly offer plan features, educational resources and access to financial advisors to equip their employees to save for their future while managing the complexities of debt in the year to come.”
PSCA Survey Highlights More than half (54%) of 403(b) sponsors are focused on compliance and reduction of fiduciary liability. They reported plans to increase internal oversight processes, seek outside counsel and/or engage in research and education to stay current on retirement plan regulations and responsibilities – ranging from participant communication to overseeing service providers and monitoring fees.
Plan sponsors are committed to improving retirement readiness by increasing participation rates (43%) and deferral rates (42%). More than three-fourths (78%) of respondents indicated that they will address these areas by increasing education and more than forty percent (48%) will provide access to a financial advisor (48%). For years, the highest priority of plan sponsors was to increase the number of employees in the plan. This continues to be one of the highest priorities for plan sponsors in 2020, with one third (30%) making plan changes to increase retirement readiness.
Plan sponsors continue to focus on financial wellness as a priority (32%).
Cybersecurity expected to increase in importance
The full report is available for download at https://www.psca.org/2019survey_403bpriorities.
About the Plan Sponsor Council of America
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