Not-for-profit 403(b) retirement plans continue to grow and adapt to new regulations and a volatile economy, according to a new study by the Plan Sponsor Council of America. Many have taken to emulating their private sector counterparts in the 401(k) market, adhering to guidelines set forth in the Employee Retirement Income Security Act (ERISA).
As part of “403(b) Plan Response to Current Conditions,” PSCA surveyed 579 not-for-profit organizations that sponsor 403(b) retirement plans to determine how they are responding to economic and regulatory changes taking place in the market.
It is harder to take advantage of plan participants if the employer is watching. By complying with ERISA provisions, the Department of Labor and the IRS have more authority to oversee plans.
“Changes have happened to these plans because of regulations and because of the need to take a hard look at what they are doing,” said Aaron Friedman, national practice leader, non-profit, for The Principal Financial Group. Sponsors of 403(b) plans have realized that an “open-ended multiple provider plan isn’t necessarily the best sort of arrangement for participants. There is no consistency of education, no consistency of message, no consistency of products with multiple providers. Participants are on their own.”