Higher education institutions are increasingly adoptingpractices more commonly seen in the corporate sector.

That is the central findings in the “Retirement Plans forInstitutions of Higher Education” study from TransamericaRetirement Solutions, which also found that the 403(b) plan is “nowoften the primary retirement funding tool — if not the onlyretirement funding tool — available to staff and faculty.”

The study also said that “the retirement plan market of HigherEducation institutions, once dominated by a small group of serviceproviders that enjoyed a favored status, is moving in the directionof exclusive arrangements with a single service provider selectedfor its capabilities and merits.”

The retirement outlook in higher education isn’t great: Just athird of higher education institutions estimate that “half or moreof their employees are on track to achieve a successfulretirement.”

In other words, that’s just one out of every two employees in onlyone out of every three institutions of higher learning.

In response, these institutions are increasingly streamliningplans, reducing the number of plans offered (13 percent, comparedwith 12 percent last year), consolidating investments (11 percentin 2014, compared with 9 percent in 2013) and streamliningrecordkeeping for multiple plans (11 percent compared with lastyear’s 6 percent).

Automatic features also are on the increase, with 44 percent ofplans offering automatic enrollment compared with last year’s 41percent, while 23 percent are offering automatic increases incontributions when last year only 8 percent did so.

But for participants, salary deferral is falling and is nowherenear what retirement experts believe is necessary for successfulretirements. In 2013, approximately 56 percent of higher edemployees contributed less than $5,000 to their retirementaccounts. In 2014, that number rose to about 67 percent — not agood trend.

The study pointed out that “(t)he decline in employeecontribution occurs as many institutions eliminate defined benefitplans or cut the fixed percent of salary they contribute to theplan.”

One way to boost contributions, according to the study, is forthese institutions to “emulate stretch-the-match formulas that haveproven so successful in other sectors of the economy.”

Lastly, there’s good news for advisors in the report. It foundthat institutions that partner with a plan advisor are more likelyto make changes aimed at improving employees' retirementreadiness.

Fifty-five percent of institutions with an exclusive arrangementwith a single retirement plan provider monitor the retirementreadiness of their plan participants compared to 23 percent ofinstitutions that work with multiple providers, the studysaid.

Among the institutions that partner with a financial advisor,nearly half estimate that 50 percent or more of their planparticipants are on track to achieve a successful retirement. Alsoof note:

• Institutions not working with an advisor decreased in 2014 (45percent vs. 48 percent in 2013);
• fifteen percent plan to hire an advisor within the next 12months vs. 10 percent in 2013).