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By December 15, 2016No Comments

Seventy percent of 403(b) plan sponsors are aware of the Department of Labor’s fiduciary regulatory package, but that number drops to less than 50 percent among small plans, according to the latest 403(b) Snapshot Survey from the Plan Sponsor Council of America (PSCA) and sponsored by the Principal Financial Group®.

In addition, the survey shows that 40 percent of all plan sponsors feel their plan service provider(s) act in a fiduciary capacity, while 50 percent say their plan advisor is not a fiduciary.

“Though the impending Department of Labor fiduciary regulatory package has certainly raised awareness of fiduciary responsibilities, plan sponsors who are unsure of their role—especially those small organizations—should review their plan governance processes with their service providers and advisors,” said Hattie Greenan, PSCA’s director of research and communications.

Plans for change

When asked what changes they’ve already made or plan to make due to the DOL fiduciary regulation, 24 percent plan to either hire an advisor to act as a fiduciary or change from a non-fiduciary advisor to a fiduciary advisor.

Other plans for change include:

  • changing their investment line-up (19 percent)
  • re-evaluating the plan’s governance structure (15 percent)

The majority (59 percent) plan to make no changes.

“This environment strongly suggests that all plan sponsors work with advisors to understand the various fiduciary roles and how responsibilities are fulfilled,” said Aaron Friedman, tax-exempt national practice leader at Principal®. “It will be a collaborative industry effort among advisors, plan sponsors and service providers.”

PSCA’s 2016 403(b) Snapshot Survey reflects responses from 281 not-for-profit organizations that currently sponsor a 403(b) plan. For more research, analysis and insights from Principal, visit the Principal Knowledge Center and connect with us on Twitter.

Earlier this year, 501(c) Services conducted a webinar on this subject and similar topics surrounding nonprofit retirement plans.


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