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Portfolio > Mutual Funds > Bond Funds

403(b) Plans: A Snapshot

By Marlene Satter

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Strategic Insight business BrightScope, in partnership with the Investment Company Institute, has released a joint research study on ERISA 403(b) plans.

“The BrightScope/ICI Defined Contribution Plan Profile: A Close Look at ERISA 403(b) Plans, 2015“ finds that the average large 403(b) plan subject to the Employee Retirement Income Security Act of 1974 offered 27 “core” investment options in 2015.

In that year, the research found, nearly all large ERISA 403(b) plans included domestic equity funds, international equity funds and domestic bond funds in their core investment offerings. In addition, close to 90% of large plans offered fixed annuities — with those products making up 22% of assets and variable annuities, including VA mutual funds, making up 24%. More than 80% of the plans offered target date funds.

Other core investment options included non-target-date balanced funds, international bond funds and money market funds.

Mutual funds made up 54% of large-plan assets in that year, while index funds, offered by 97% of large plans, made up 21% of assets; 81% of large plans offered TDFs, up from 51% in 2009, and they represented 19% of plan assets in 2015 — a rise from 2009’s 7%.

The majority of 403(b) plan sponsors had employer contributions, with DOL Form 5500 Research File data indicating that 81% of large plans had employer contributions in 2015. That was an increase from 74% in 2009. Such contributions totaled $8 billion, or 29% percent of all contributions, in 2015.

Marlene Satter

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