Cammack LaRhette Consulting’s second annual survey found that the changing regulatory environment is a major concern plan sponsors and has created a focus on fiduciary oversight. Establishing a fiduciary process was listed as the top challenge facing plan sponsors by 82% of survey respondents.
With heightened fiduciary concerns, plan sponsors are frequently turning to consultants and advisers to help respond to the changes in the legal environment, asserts Cammack LaRhette. Private colleges and universities are seeking outside assistance in managing their retirement programs, with two-thirds of plan sponsors using a consultant or an investment adviser. This is a significant increase from last year’s survey when one third of plan sponsors were working with consultants and advisers.
The survey also found plan sponsors are limiting the number of products (vendors and investment options) offered to their employees, with 52% of survey respondents indicating that they use a single provider for their retirement plan, and 93% using three vendors or fewer.
In general, benefits delivered to participants in retirement plans of private higher education institutions are more generous than those offered by other types of non-profit organizations, the firm says. The majority of universities in the study indicated an immediately vested employer contribution of 8% of pay or greater, through a combination of base and matching contributions.
“Over the past year, private higher education institutions have continued to adjust to the changing 403(b) landscape," said Jeff Levy, Practice Leader at Cammack LaRhette Consulting. “New regulations coupled with the anticipation of future legislation have forced plan sponsors to adopt new perspectives on how to successfully administer a 403(b) plan in today’s environment. We hope this survey provides some insight into the shifting landscape and will serve as a tool to plan sponsors in understanding and acclimating to these changes.”
The survey received responses from over 160 private colleges and universities across the country.
More about Cammack LaRhette Consulting is at http://www.clcinc.com.