Non-profit organizations and their employees are doing more to improve retirement readiness, the Plan Sponsor Council of America found in a survey. Participants are now saving an average of 6.2% of their salaries, up from 5.4% in 2011. Employers are also matching employees’ first 4.6% of pay, up from 3.8% last year.
Additionally, 19% of 403(b) plans are automatically enrolling participants, up from 16.3% last year. However, 75% of these 403(b) sponsors are deferring 3% or less of participants’ pay, well below the recommended 6%.
More than half, 61.5%, of 403(b) sponsors evaluate whether their retirement plan is reaching its goals, and within this group, there was a 24% increase from last year in sponsors measuring their participants’ ability to meet retirement income goals. Forty-three percent of 403(b) plans work with an adviser, and among them, 50% ask the adviser for help with their fiduciary responsibility to select and monitor their investments, up from 39% last year. Twenty-six percent of 403(b) sponsors are examining their plans’ expenses, up from 16.8% in 2015, and nearly 57% have an investment policy statement, up sharply from 45% in 2009.
“Last year’s most significant finding was the jump in the number of organizations making contributions to the plan,” says Hattie Greenan, director of research and communications at the Plan Sponsor Council of America. “This year we see a boost in the amount those employers are contributing. These increases are good news in terms of helping improve participant outcomes.
Principal Financial Group sponsored the 403(b) annual benchmarking survey. Information about how to purchase the full report can be found here.