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403(b) Survey Reveals Progress and Stability

Nearly half restored matches, increased participation according to new research from The Profit Sharing/401k Council of America

December 13, 2010 (Des Moines, IA) - Sponsors of 403(b) plans took important steps forward in managing their plans over the past three years—despite a grueling economy and sweeping new regulation, according to a new survey of 403(b) plan sponsors from the Profit Sharing/401k Council of America (PSCA).

The survey, sponsored by the Principal Financial Group®, also revealed that the vast majority (73 percent), of 403(b) sponsors held firm on making employer contributions to their plans and 40 percent of those that suspended matches are restoring them.

“We saw real stability in the midst of volatility as 403(b) plans began restoring employer matches at the same rates as 401(k) plans,” says David Wray, PSCA president, about results from the just-released 403(b) Plan Response to Changing Conditions survey. “We also saw a significant increase in employee education as 403(b) sponsors helped employees focus on rebuilding. That may explain why these plans also report increased participation.”

Highlights from the survey include:

  1. More than a third (38 percent) of respondents report that participation rates have increased.
  2. More than half of respondents (50.8 percent) increased employee education and communication efforts over the last year.
  3. Nearly a quarter (22.6 percent) added investment advice.
  4. Nearly 16 percent of 403(b) plans that suspended the match plan to reinstate it within the next 6 months.

“Clearly, these 403(b) plan sponsors have shown resilience over these recent tumultuous years,” says Aaron Friedman, national non-profit practice leader, The Principal®. “The survey shows that 403(b) plans appear to have adapted remarkably well to challenging economic times and major regulatory change.”

The 403(b) Plan Response to Changing Conditions survey—part of an ongoing series of PSCA surveys on 403(b) plans—reports on the 2009-2010 plan year experience of 599 403(b) plan sponsors from across the country.

» Find full survey results at

About PSCA

PSCA, a national non-profit association of 1,200 companies and their 6 million employees, advocates increased retirement security through defined contribution programs to federal policymakers and makes practical assistance with plan design, administration, investment, compliance, and communication available to its members. PSCA conducts unbiased, comprehensive research on defined contribution plan practices and releases trend data and best-practice information to policymakers and plan sponsors.

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About the Principal Financial Group

The Principal Financial Group® (The Principal®)[1] is a leader in offering businesses, individuals and institutional clients a wide range of financial products and services, including retirement and investment services, life and health insurance, and banking through its diverse family of financial services companies. A member of the Fortune 500, the Principal Financial Group has $284.7 billion in assets under management[2] and serves some 18.9 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG.

The Principal Financial Group and The Principal are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
As of Sept. 30, 2010.




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Call 515.246.4907 or see the full Media Relations contact list.

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