Data & Research September 15, 2009

‘Active’ Sponsorship Contributes to Success of 403(b)s

A new report from The Principal suggests that actively sponsored non-profit plans, including 403(b) plans, are achieving the same level of success as their for-profit counterparts.

Reported by

“The Total View 2009” said that among non-profit organizations that sponsor retirement plans with services provided by The Principal, participation and deferral rates held steady from 2007 (64.6%) to 2008 (64.9%) and the participation rate is comparable to the overall participation rate among for-profit and non-profit organizations at 66.1%.

In addition, in 2008, non-profit plans using The Principal’s program of one-on-one education at the worksite saw participants’ overall contribution level increase to the same level as for all DC plan participants (7.3%). The 7.3% rate in plans using the education program compared to an overall contribution level of 6.4% for those plans not using the education program.

The report is based on calendar-year 2007 and 2008 data from plans with services provided by The Principal, which includes 2008 data based on 2,358 non-profit plans and 2007 data based on 2,248 non-profit plans.

The report is available at www.principal.com/totalview.

Deals & People September 15, 2009

Midwest Capital Advisors Wins Mich. School District Business

Midwest Capital Advisors (MCA) of Grand Rapids, Michigan, has been selected as the provider of 403(b) and 457 retirement plan investments by the Michigan Retirement Investment Consortium (MRIC).

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MRIC consists of 250 member school districts representing nearly 120,000 school system employees across Michigan. It was formed in 2008 to meet the challenges posed by new 403(b) plan regulations and to find ways to improve quality and pricing of investment offerings available to employees of its member districts, according to a press release.

MCA successfully competed for the “Single Source” designation against approximately 20 other investment firms. “The goal of the ‘Single Source’ concept was to find one provider that offered participants the best combination of investment offerings and competitive fees so that a participant could effectively invest his or her entire retirement plan account with a single investment provider,” the release said.

MCA said it has invested considerable resources in developing tools and investment offerings that assist participants in not only assessing their current situation and their objectives, but also advising and helping them choose and implement investment solutions that best suit their needs.

“This gives them a definite sense of empowerment over their financial future, something that has not existed on a broad basis in the past,” said George Wanty, a co-founder and MCA’s chief investment strategist, in the press release. “One of the greatest rewards for me and my colleagues is to see the satisfaction our clients have in gaining the understanding of how investment success is achieved and assisting them in confidently proceeding down the path that can best get them there.”

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