Despite difficult economic conditions and new regulations, 403(b) plan sponsors stabilized their plans over the past three years.

According to a survey of 403(b) plan sponsors from the Profit Sharing/401k Council of America, which was sponsored by the Principal Financial Group, 73% of 403(b) sponsors held firm on making employer contributions to their plans and 40% of those that suspended matches are restoring them.

“We saw real stability in the midst of volatility as 403(b) plans began restoring employer matches at the same rates as 401(k) plans,” said David Wray, the president of the PSCA. “We also saw a significant increase in employee education as 403(b) sponsors helped employees focus on rebuilding. That may explain why these plans also report increased participation.” 

According to the survey, 38% of respondents report that participation rates have increased and 50.8% increased employee education and communication efforts over the last year.

Nearly a quarter (22.6%) added investment advice, and 16% of 403(b) plans that suspended the match, plan to reinstate it within the next six months.  

“Clearly, these 403(b) plan sponsors have shown resilience over these recent tumultuous years,” said Aaron Friedman, the national non-profit practice leader at the Principal.  “The survey shows that 403(b) plans appear to have adapted remarkably well to challenging economic times and major regulatory change.”

The PSCA is a national non-profit association of 1,200 companies and their six million employees.

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