403(b) Plans Year to Year

The results of the 2010 and 2011 403(b) Plan Surveys from the Profit Sharing/401k Council of America (PSCA) reveal some interesting differences.

Eighty-five percent of employees at organizations that responded to The Profit Sharing/401k Council of America’s 2011 403(b) Plan Survey are eligible to participate in their organization’s 403(b) plan (see “403(b) Plans Increase Use of Advisers and Online Communications“). The average percentage of eligible employees with a balance in the plan is 74.7%. An average of 64.2% of eligible employees contributed to the plan in 2010.   

This participation rate is actually lower than in the 2010 survey, in which 84.2% of employees at respondent organizations were eligible to participate in their organization’s plan (see “Recession no Hindrance to 403(b) Plan Transformation“). The 2010 survey revealed that the overall participation rate for employees eligible to participate in a 403(b) plan remained unchanged from the 2008 survey at 75.8%.   

This could just be mathematical differences due to the increase in the number of sponsors participating in the survey.The Principal said a record 712 plan sponsors – an increase of 29% over 2010 – participated in 2011.  

The average account balance for active plan participants also decreased from $71,879 in last year’s survey to $70,794. Both studies found nearly 83% of organizations make contributions to their 403(b) plans, and nearly all (97%) permit participant contributions in their plans.    


The 2011 study found pre-tax contributions are permitted in 95.6% of plans, while Roth and 401(m) after-tax contributions are permitted in 19.5% of plans. Nearly 7% of plans require participants to contribute to the plan as a condition of employment.  The 2010 study found pre-tax contributions were permitted in 97.1% of plans, while Roth and 401(m) after-tax contributions were permitted in 15.6% of plans. 

Fifty-seven percent of plans provide immediate vesting for non-matching employer contributions, and 60.5% of plans provide immediate vesting for matching contributions. In last year’s study, more than three quarters (76.2%) of plans provided immediate vesting for non-matching contributions and 65.3% of plans provided immediate vesting for matching contributions.  

Among plans that do not provide immediate vesting, graduated vesting is the most common arrangement for both matching and non-matching contributions, according to both surveys.    

Plans in the 2011 survey offer an average of 26 funds for organization contributions and an average of 28 funds for participant contributions.  Twenty-one percent of plans have between 21 and 50 funds and 11.3% have more than fifty funds available for participant contributions.   Last year’s study found an average of 20 funds for organization contributions and an average of 21 funds for participant contributions. Twenty-eight percent of plans offered 26 or more funds for participant contributions.  

In both years, three-quarters of plans allowed participants to take hardship withdrawals. In 2010, 1.6% of plan participants took a hardship withdrawal, while last year’s study revealed 1.3% took a hardship withdrawal in 2009.  

Seventy-two percent of plans allow participants to borrow against their plan assets; 49.5% allow loans for any reason, while 22.6% allow loans only in hardship situations. Last year, 73% of responding plans said they allowed loans - 48.7% for any reason and 24% only in hardship situations.