June 08, 2012
--- Five years after passage of 403(b) plan regulations,
sponsors are now looking beyond the 403(b) quick fix. ---
Michael Levin, area vice president
at Gallagher Retirement Services, told attendees at the 2012 PLANSPONSOR
National Conference that 403(b) sponsors can use 401(k) plan strategies for
improving plans and participant outcomes. To encourage participation for
example, 403(b) sponsors should consider adding automatic enrollment and
automatic deferral escalation. They can also add a contribution match program
or change the match formula to encourage higher savings by
participants.
Levin suggests sponsors adopt an
education policy statement that lists ways they plan to communicate to
participants about saving and their 403(b) plans. It notes how to measure the
impact of education efforts. Levin says the statement should include some
guidelines for communicating to different employee demographics, but should not
be too specific.
Chris Cannova, director of
compensation and benefits at the Archdiocese of Chicago, says his plan uses
auto enrollment and auto deferral increase. In addition, the Archdiocese holds
regular employee meetings and is now doing a pre-retirement seminar for
employees, which covers the 403(b) plan, the Archdiocese’s frozen defined
benefit (DB) plan and Social Security benefits for employees.
Cannova says his next step is to use
targeted employee communications such as those that focus on different age
groups.