Close Close
Sign In
Newsletters
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards
Podcast Center Video Center Webcasts Resource Center Events
About ThinkAdvisor Contact Us Advertise With Us Asset & Logo Licensing Sitemap Terms of Service Privacy Policy Copyright © 2024 ALM Global, LLC. All Rights Reserved.
ThinkAdvisor

Life Health > Life Insurance

403(b)s Set Defaults

By Staff Writer

X
Your article was successfully shared with the contacts you provided.

Many nonprofit retirement plans are using target-date funds and lifestyle funds to serve participants who fail to allocate their own plan assets.

The Profit Sharing/401k Council of America, Chicago, has published statistics on 403(b) plan investment options in a report based on information provided by 144 403(b) plan sponsors.

About 27% of the participating plans have automatic participant enrollment programs, the PSCA says.

About 26% of the automatic enrollment programs apply to all non-participants, but 74% apply only to new hires.

The council also asked about “qualified default investment alternatives,” or investment options for participants who have failed to indicate how they want plan administrators to allocate their plan assets.

The council found that 37% of the plans use target-date funds as QDIAs, 16% use lifestyle funds and 16% use balanced funds.

The government has discouraged use of fixed-rate funds as QDIAs, because of a belief that plans that include some stock will do better in the long run, and only 13% of the plans use money market funds as their QDIAs. None of the plans use stable value funds as QDIAs.

About 7.9% of the plans said they put QDIA funds in professionally managed accounts.

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.