Increasing 403(b) Plan Participation in the K-12 Market

Working together to increase K-12 employee participation in 403(b) plans can produce benefits for advisers, school districts and employees alike.

Charles M. Riharb, PlanMember Securities Corporation, explained to attendees at the National Tax Sheltered Accounts Association’s (NTSAA) 403(b) Advisor Summit that K-12 employees are so far behind in saving for retirement because there is not a “culture of savings” in schools.  School districts lack human resources personnel to focus on this, employees are in multiple working sites, there is a lack of education, and ease of enrollment and government plans are not subject to the same participation requirements as corporate plans.  

In addition, Riharb explained, employees have other financial concerns such as debt, costs for children’s college education and mortgages. 

Utilizing a financial adviser can make a difference; Riharb said research shows employees spending some time one-on-one with a financial adviser saved more than twice the amount as those reporting no time.  The gap triples for those reporting a lot of time spent with an adviser. 

The solution to getting employees to participate in their retirement plans is to provide financial literacy, an educational curriculum about retirement plans and promoting a strong benefit program, according to Riharb.   

Employers can: 

  • provide a website to promote benefit plans, 
  • e-mail employees to encourage participation, 
  • offer frequent Benefit Fairs in multiple locations, 
  • provide regular educational workshops from multiple vendors, and  
  • hold open enrollment meetings. 


Riharb said advisers can work with employers to design an education curriculum that promotes a consistent message to all employees and is broken into several meetings on specific topics, rather than one meeting with a large amount of information.  Employers should also offer onsite assistance and support.  

According to Riharb, such an education curriculum will result in increased 403(b) participation rates, financially-fit employees who are more productive and focused, employees who are able to retire early or at normal retirement age and improved appreciation by employees of the school district and its benefit package.  

Along with the benefits to the K-12 plan sponsor, greater 403(b) participation can help employees achieve their retirement income goals and potentially increase revenue for plan advisers.