PLANSPONSOR - June - July 2022 - 9

Rouse says.
The offerings on 401(k) and 403(b)
plan menus differ as well. In recent years,
many 401(k)s have begun offering lowercost
collective investment trusts, an option
currently unavailable under law to 403(b)s.
For-profit plan participants will more
likely have outstanding loans. The 2021
PLANSPONSOR Defined Contribution
Survey found that just 7.3% of participants
in 403(b) plans had an outstanding plan
loan at the time of the survey, compared
with 12.4% of participants in all plans.
A factor in lower loan usage may be plan
design, as over half of 403(b)s restrict
participants to one outstanding plan loan
at a time, Rouse says.
Here, 403(b)s may have an edge over
401(k)s when it comes to retirement readiness.
Defaulting on a plan loan can result
in an average $300,000 in lost retirement
security over the course of a participant's
career, says an analysis by Deloitte.
More 401(k)s use automatic enrollment
than do 403(b)s. The percentage of
403(b) plans implementing auto-enrollment
features has been inching up-from
37% in 2017 to 42% in 2021-say the
PLANSPONSOR DC surveys performed
over those years. But that rate remains
far below the 60% of 401(k) plans that
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provides support
when employees
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95%
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92%
The plan
delivers better
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87%
The adviser
encourages
participation.
86%
PLANSPONSOR.COM June - July 2022 9
auto-enroll, according to the Defined
Contribution Institutional Investment
Association's Retirement Research Center.
Another reason for lower use of automated
features in 403(b)s is that many
states
limit
public-sector employers'
ability to automatically deduct money
from their workers' paychecks.
Nonprofit plan sponsors are less apt to
offer financial wellness education. Six in 10
for-profit companies offer financial education
to employees, compared with just over
half of nonprofits, according to PNC. That
said, among those that do not offer the
benefit, 36% of nonprofit plan sponsors
said they plan to do so, while 22% of forprofit
plan sponsors said the same.
" I think employers are stepping up
because they realize that with a more
remote workforce, they need to do more
to get people engaged with the retirement
plan, " says Alistair Jessiman, head of PNC
Institutional Asset Management.
Participation rates in financial wellness
programs at 403(b) plans also tend
to be lower than at 401(k) plans, the PNC
research found.
" The numbers are still not as good on
the outcomes if people aren't participating
in the education part, " Jessiman says.
" There's a high correlation between the
education and participants taking advantage
of things like getting the match and
other tools designed to help them. "
403(b)s
are
declining
as
401(k)s
increase. The total number of ERISA 403(b)
plans has inched downward, to 20,900
plans in 2020 from 21,900 a decade
earlier. By contrast, the number of 401(k)
plans has continued to grow, to 595,000
from 510,000 over the same period, says a
Government Accountability Office report.
The lessening number of 403(b) plans
is partly due to the merger and acquisition
activity in the health-care sector,
which employs a large share of 403(b) plan
participants, the GAO found. Health-care
industry 403(b) plans represented the most
quickly shrinking sector, with the number
of 403(b)s at health-care organizations
falling by 10.4%; this is even while the total
assets in that sector grew by 140%.
Despite all these differences, the
gap between savings in 403(b) plans and
401(k) plans is shrinking. In last year's
third quarter, 403(b) savers had an average
account balance of $110,800, about 88%
of the average 401(k) balance of $126,100,
Fidelity Investments says. That is more
than double the amount that 403(b) savers
had in their account in Q3 2011.
-Beth Braverman
http://www.PLANSPONSOR.COM

PLANSPONSOR - June - July 2022

Table of Contents for the Digital Edition of PLANSPONSOR - June - July 2022

INSIGHTS
RULES & REGULATIONS
UPFRONT
2022 Plan Sponsor of the Year Winners
By Extension
Talent Management
The Best Line of Defense
Under-the-Radar Plan Errors
FIDUCIARY FORUM
INSIDE ANGLE
PLANSPONSOR - June - July 2022 - Cover1
PLANSPONSOR - June - July 2022 - Cover2
PLANSPONSOR - June - July 2022 - 1
PLANSPONSOR - June - July 2022 - INSIGHTS
PLANSPONSOR - June - July 2022 - 3
PLANSPONSOR - June - July 2022 - RULES & REGULATIONS
PLANSPONSOR - June - July 2022 - 5
PLANSPONSOR - June - July 2022 - 6
PLANSPONSOR - June - July 2022 - 7
PLANSPONSOR - June - July 2022 - UPFRONT
PLANSPONSOR - June - July 2022 - 9
PLANSPONSOR - June - July 2022 - 10
PLANSPONSOR - June - July 2022 - 11
PLANSPONSOR - June - July 2022 - 12
PLANSPONSOR - June - July 2022 - 13
PLANSPONSOR - June - July 2022 - 2022 Plan Sponsor of the Year Winners
PLANSPONSOR - June - July 2022 - 15
PLANSPONSOR - June - July 2022 - 16
PLANSPONSOR - June - July 2022 - 17
PLANSPONSOR - June - July 2022 - 18
PLANSPONSOR - June - July 2022 - 19
PLANSPONSOR - June - July 2022 - 20
PLANSPONSOR - June - July 2022 - 21
PLANSPONSOR - June - July 2022 - 22
PLANSPONSOR - June - July 2022 - 23
PLANSPONSOR - June - July 2022 - 24
PLANSPONSOR - June - July 2022 - 25
PLANSPONSOR - June - July 2022 - 26
PLANSPONSOR - June - July 2022 - 27
PLANSPONSOR - June - July 2022 - By Extension
PLANSPONSOR - June - July 2022 - 29
PLANSPONSOR - June - July 2022 - 30
PLANSPONSOR - June - July 2022 - 31
PLANSPONSOR - June - July 2022 - Talent Management
PLANSPONSOR - June - July 2022 - 33
PLANSPONSOR - June - July 2022 - The Best Line of Defense
PLANSPONSOR - June - July 2022 - 35
PLANSPONSOR - June - July 2022 - Under-the-Radar Plan Errors
PLANSPONSOR - June - July 2022 - 37
PLANSPONSOR - June - July 2022 - FIDUCIARY FORUM
PLANSPONSOR - June - July 2022 - 39
PLANSPONSOR - June - July 2022 - INSIDE ANGLE
PLANSPONSOR - June - July 2022 - Cover3
PLANSPONSOR - June - July 2022 - Cover4
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