Increasing 403(b) Plan Participation in the K-12 Market

February 16, 2012 (PLANSPONSOR.com) – Working together to increase K-12 employee participation in 403(b) plans can produce benefits for advisers, school districts and employees alike. 

Charles M. Riharb, PlanMember Securities Corporation, explained to attendees at the National Tax Sheltered Accounts Association’s (NTSAA) 403(b) Advisor Summit that K-12 employees are so far behind in saving for retirement because there is not a “culture of savings” in schools.  School districts lack human resources personnel to focus on this, employees are in multiple working sites, there is a lack of education and ease of enrollment and government plans are not subject to the same participation requirements as corporate plans.  

In addition, Riharb explained, employees have other financial concerns such as debt, costs for children’s college education and mortgages. 

Utilizing a financial adviser can make a difference; Riharb said research by ING (“Help Wanted” White Paper, ING Retirement Research Institute 6, http://ing.us/rri/file_repository/78/Help-Wanted-White-Paper.pdf) shows employees spending some time one-on-one with a financial adviser saved more than twice the amount as those reporting no time.  The gap triples for those reporting a lot of time spent with an adviser.