Skip navigation.
Go to the Principal Financial Group(R) home page
Secure  Account Login

Select login type:

More News
Quick Links

Rare Insight into TPA Services in New 403(b) Survey

Research from Profit Sharing/401k Council of America Shows Benefits, Opportunities with TPA Services

July 6, 2011 (Des Moines, Iowa) – A growing number of 403(b) retirement plan sponsors use third-party administrators (TPAs) for key plan services—and for good reason. A new analysis of research from the Profit Sharing/401k Council of America (PSCA) reveals trends toward stronger plan design among 403(b) plans that use TPAs.

PSCA's 2011 403(b) Plan Survey, which was sponsored by the Principal Financial Group®, is one of the only sources of comprehensive research in the 403(b) plan market. The Principal® conducted this custom analysis of the survey results to uncover rare insight about the use and value of TPAs in the non-profit market.

“The Principal is dedicated to providing this much-needed research because we believe in the value TPAs provide,” says Jeff Schreiber, vice president of TPA business development at The Principal. “We're committed to helping TPAs find opportunities to grow their businesses and enhance their services. Clearly this analysis validates the significant opportunity for them in the non-profit marketplace.”

Prevalence and value of TPA services

The survey shows an increase in the percent of 403(b) plan sponsors who use TPAs, from 24.6 percent in 2010 to 28.7 percent in 2011. The survey also disproves the theory that TPAs only work in the small plan market—56 percent of all survey respondents with 1,000 or more participants use a TPA.

“Responses to the survey also demonstrate the value TPAs bring to 403(b) plans,” says David Wray, president, PSCA. “For example, 403(b) plan sponsors who use TPAs reported higher default deferral percentages.” More TPA-serviced plans offer a four percent default deferral rate than all plans (21.9% vs. 16.4%), and fewer offer a three percent default deferral rate than all plans (40.6% vs. 49.3%).

Opportunities for TPAs

The survey also revealed other accomplishments—and opportunities—for TPAs in the areas of:

  • Investment policy statements. More TPA-serviced plans (53.9%) have investment policy statements than all plans (46.2%) in the survey.
  • Participation. The participation rate among TPA-serviced plans (63.7%) is lower than among all plans (74.7%). This may present an opportunity for TPAs to work with financial professionals and service providers who play active roles in enrollment and ongoing participant education.
  • Investment options. TPA-serviced 403(b) plans offer, on average, 42 different investment options, while the average number of investment options for all plans is just 28. TPAs may want to consider the benefits of offering fewer investment options, since participants tend to become overwhelmed by too many choices and, as a result, end up choosing not to participate at all.

Full survey results may be purchased from PSCA at

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

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.

PSCA and David Wray are not affiliated with the Principal Financial Group or any of its member companies.

t11062901k0 - 07/2011

“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.

Return to top


Call 515.246.4907 or see the full Media Relations contact list.

Call 515.246.4907 or see the full Media Relations contact list.

Have a question? Call us at 1.800.986.3343

Copyright © , Principal Financial Services, Inc.
Disclosures and Terms of Use | Products and Services Disclosures | Privacy and Security
Securities offered through Princor Financial Services Corporation, member SIPC