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403(b) Plan Sponsors Rising to the Challenge

Plan sponsors adapting to new regulations, according to new survey from Profit Sharing/401k Council of America

May 23, 2011 (Des Moines, IA) - In the wake of sweeping regulatory changes from the Department of Labor (DOL), 403(b) plan sponsors are in the final stages of compliance—while also adapting to participant needs and coping with volatile investment markets. These insights and more are revealed in the latest 403(b) plan sponsor survey from the Profit Sharing/401k Council of America (PSCA).

The survey, which was sponsored by the Principal Financial Group®, drew responses from a record number (712) of 403(b) plan sponsors, an increase of 29 percent from the previous year’s survey.

“This significant increase shows that this survey has truly become the industry source for 403(b) plan information,” says Aaron Friedman, national non-profit practice leader, The Principal®.

The survey shows increases in:

  • Roth contributions. In 2010, 16.9 percent of 403(b) plan sponsors surveyed permitted Roth after-tax contributions, up from 13.9 percent in 2009 and 10.9% in 2007.
  • Online communication. While 63.1 percent of respondents still use on-site, one-on-one meetings to educate participants, a growing number of respondents also use electronic communication methods (E-mail: 59.5% in 2010 vs. 51.5% in 2009; Intranet/Internet sites: 50.2% in 2010 vs. 43.9% in 2009; Webinars: 15.1% in 2010 vs. 9.7% in 2009).
  • Help from investment advisors. More than 45 percent of respondents use an independent investment advisor to help with fiduciary responsibilities versus 41 percent in 2009.
  • Use of target date funds. Just over 69 percent of plans offer a target date fund as an investment option (up from 51.2% in 2009).
  • Form 5500 assistance. Just over 77 percent of respondents use an auditor, recordkeeper or aggregator to prepare their Form 5500, up from 66.1 percent in 2009.

“This year’s survey proves that 403(b) plan sponsors are still working hard to comply with the new regulations,” says David Wray, president, PSCA. “Although the rate of change has slowed since our 2009 survey, there are still significant adjustments underway as plan sponsors respond to the needs of their participants and their plans.”

Full survey results are may be purchased from PSCA at

About PSCA

PSCA is a national non-profit association of 1,200 organizations and their 6 million employees and advocates increased retirement security through defined contribution programs to federal policymakers. PSCA conducts unbiased, comprehensive research on defined contribution plan practices and releases trend data and best-practice information to policymakers and plan sponsors.

For more news and insights from The Principal, connect with us on Twitter at

About the Principal Financial Group

The Principal Financial Group® (The Principal®)[1] is a retirement and global asset management leader. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, investment services and insurance through its diverse family of financial services companies.  A member of the FORTUNE 500®, the Principal Financial Group has $327.4 billion in assets under management[2] and serves some 16.4 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 March 31, 2011.

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