In an effort to capitalize on the increasing number of retirement programs for nonprofit organizations, Hartford Financial Services Group Inc. plans to increase sales of its 403(b) retirement plans.
The Simsbury, Conn., company announced Wednesday it will work with a national network of nearly 200 third-party administrators - many of which currently sell Hartford’s [HIG] 401(k) plans - that sell 403(b) plans to nonprofit healthcare, charitable, educational and religious organizations.
The Hartford’s PASSport program, which provides an array of administrative and record-keeping services to 401(k) plans through third-party administrators, is being expanded to include 403(b) plans with less than $5 million in assets under management.
The Hartford’s Premier Innovations 403(b) retirement program is available in this market. Premier Innovations allows plan sponsors to select from more than 200 investment options from more than 40 fund companies. Cerulli Associates, a consultant in the retirement plans marketplace, projects that assets under management within 403(b) plans will grow from an estimated $633.5 billion in 2009 to $807.6 billion in 2014.
Moore said that many nonprofit companies prefer to work with third-party administrators, which typically provide sponsors of defined contribution plans with services such as plan design, loans and withdrawals processing, compliance testing, tax reporting and other administrative functions.
The demand for such expertise is growing dramatically as recently revised rules for 403(b) retirement plans are making it necessary for nonprofit institutions to enhance their administrative capabilities, said Peter Moore, a vice president of The Hartford’s public sector retirement sales.
“Most small employers, particularly nonprofit organizations, do not have a dedicated, in-house specialist to handle retirement administration,” he said. “Working with a local TPA fills the need to have a retirement expert on hand, making it easier to help employees plan for their retirement.”