Transamerica says it is now offering its first-ever 403(b) multiple employer plan for higher education, created in partnership with the Wisconsin Association of Independent Colleges and Universities (WAICU).
According to WAICU and Transamerica, the new retirement program is available to WAICU’s membership of 24 colleges and universities, which have a potential of more than 17,000 eligible participants and over $3 billion in retirement plan assets.
The news comes as wider public and retirement industry support builds behind multiple employer plans, known as “MEPs.” In particular, there has been a burgeoning advocacy effort supporting the expansion of so-called “open MEPs,” which unlike the new WAICU plan, would not just include employers that share an industry niche. Membership in this new MEP is limited to accredited, non-profit higher education institutions headquartered in Wisconsin.
The news also comes as a large number of Employee Retirement Income Security Act (ERISA) lawsuits are playing out in the district and appellate courts across the U.S., testing whether 403(b) plan sponsors of major universities have sufficiently exercised their bargaining power or allowed inefficient recordkeeping arrangements to persist over long periods of time. Indeed, this new WAICU MEP is being created specifically “to help members reduce plan costs, streamline the administrative experience, and take advantage of embedded 3(21) administrative fiduciary protection.”
“The retirement plan participants also will benefit from a consolidated account experience and a comprehensive array of opportunities for retirement guidance overseen by an independent investment adviser,” Transamerica and WAICU report. “Participating institutions have the opportunity to collaborate with Transamerica to design a customized participant education experience.”
Reflecting on the new partnership, Brodie Wood, senior vice president at Transamerica, says multiple employer plans have clearly gained popularity with U.S. corporations, but they have remained largely unexplored as yet by the non-profit sector.
“The Wisconsin Association of Independent Colleges and Universities is entrepreneurial in that it took the initiative to offer their members a solution that can reduce costs, and create administrative efficiencies, all while using a single vendor,” Wood concludes. “This 403(b) multiple employer plan is truly an innovative benefit WAICU provides to their members, and we are honored they chose Transamerica after learning about our long history with multiple employer plans.”