403(b) Plan Sponsors Offer Education About a Variety of Financial Wellness Topics

Two-thirds (66.8%) of 403(b) plan sponsors polled for the 2018 PLANSPONSOR Defined Contribution Survey agreed with the statement, “Our organization has a responsibility to improve the ‘financial wellness’ of our employees.” This compares to 59.5% of defined contribution (DC) plan sponsors overall, which includes 403(b) plan sponsors.

The survey finds that 403(b) plan sponsors offer more formal financial education/guidance on a variety of topics than the overall 4,000 DC plan sponsors surveyed. More than half (56.8%) of 403(b) plan sponsors reported they offer formal education/guidance about savings strategies, compared to 40.4% of respondents overall, and 46% provide formal education/guidance about budgeting (compared to 26.6%).

Slightly more than 46% provide education/guidance about financial markets and investing basics (compared to one-third), and 32.4% do so about credit/debt management (17.3%). More than one-quarter (27.4%) of 403(b) plan sponsors provide formal education/guidance about college saving (15.2%), and 39.4% do so about retirement health care options (24.1%). Approximately 39% of 403(b) plan sponsors provide education/guidance about Social Security withdrawal options/strategies, compared to 19.2% of respondents overall.

In addition, 41% of 403(b) plan sponsors educate about rolling past balances into their plan (28%), and 39.4% provide education/guidance about rollover options for separated employees (25.2%).

Nearly 61% of 403(b) plan sponsors offer financial/investment advice to participants via onsite meetings with an adviser, compared to 45.8% of respondents overall, while 46.3% do so via proprietary services offered through their plan recordkeeper (compared to 35.9%). 403(b) plan sponsors are also ahead of the game when it comes to providing personalized communications (42.6% vs. 31.1% of respondents overall) and targeted communications (47.4% vs. 31%).

According to the survey, not only do 403(b) plan sponsors offer education/guidance about college savings, they also, to a higher degree than respondents overall, offer college savings and student loan repayment benefits. Nearly 16% make an employer contribution to a 529 plan for college savings for participants, compared to 7.9% of respondents overall. Eight percent of 403(b) plan sponsors reported they offer a tuition reimbursement program for higher education/tuition expenses incurred while employed (compared to 6.1%), 56.3% offer a student loan repayment/reimbursement program (40.9%) and 8.7% offer student loan restructuring/refinancing assistance (2.6%).

 

More information about the 2018 PLANSPONSOR DC Survey, including a link to purchase a reprint, is available here.