A new study by LIMRA looks at the differences between health care and higher education 403(b) retirement plans.
The two market segments together represent $485 billion, or 67 percent, of the 403(b) market, and while both the higher education and healthcare market segments utilize 403(b) plans, higher education plans have a higher participation rate and are more likely to offer a match than health care plans.
The study found that higher education plans also are more likely to use multiple providers.
Health care plans, meanwhile, are more likely to offer a defined benefit plan than their counterparts in higher education. Both market segments are equally likely to offer automatic enrollment, but health care plans are more likely to use automatic deferral escalation.
Half of health care firms and one-third of education firms use an advisor or consultant.
The study also observed a distinction between the objectives of 403(b) plan sponsors compared with 401(k) plan sponsors.
In the survey, 403(b) plan sponsors were more likely to say the primary objective of their plan is to help employees save enough to retire (86 percent). By contrast, about half of 401(k) plan sponsors reported that the primary objective of their plan is to offer a competitive benefit to attract and retain talent.
The 2013 report “Exploring 403(b) Plan Practices and Trends: Healthcare and Higher Education” was conducted by LIMRA with select results from the Boston Research Group’s 2012 Defined Contribution Provider survey of the 401(k) industry.