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403(b) ObservationsPresented by:Karl W. Kunkle, CPA, J.D., PFS, AIFAPartnerSchneider Downs Wealth Management Advisors, LPSD Retirement Plan Solutions Division
The percentage of all 403(b) assetsheld by one (1) provider – TIAA‐CREFSource: Pensions & Investments2
The percentage of 403(b) assetsheld in mutual funds. 47% of assets are in fixed annuitiesand 31% of 403(b) assets are in variable annuitiesSource: ICI, LIMRA3
Average participation rate in 403(b) plansSource: Plan Sponsor 403(b) Survey4
Average number of investment options in 403(b) plansSource: Plan Sponsor 403(b) Survey5
403(b) sponsors using a 50% of first 6% ofsalary match (effective 3%)45% of 403(b) offer less match30% of 403(b) sponsors offer more matchSource: Plan Sponsor 403(b) Survey6
Average number of providers in 403(b) plansSource: Source Media7
Percentage of plan sponsors that have been with theircurrent provider greater than 7 yearsSource: Plan Sponsor 403(b) Survey8
5.4%and5 to 2Percentage of plan sponsors consolidatingproviders in 2011On average, plans that consolidated providerscut the number from 5 to 2 providersSource: PSCA9
Percentage of 403(b) marketrepresented by higher educationSource: Cerulli10
What others are doing?SMU ‐Went to Diversified from Fidelity, TIAA‐CREF and Vanguard. 500 fund offeringsto 20Johns Hopkins ‐5 providers to 3 providers with setplans to move to 1 provider by 2017GettysburgCollege ‐Pepperdine ‐TIAA‐CREF as single recordkeeper withoptions from Vanguard, T. Rowe andEaton VanceDiversified as sole provider mappingassets from 3 of 4 vendors11
What others are doing? cont’dMichigan State‐Cut providers from 6 to 2. Fidelity andTIAA‐CREFPurdue‐Consolidated all recordkeeping withFidelity. Cut providers TIAA‐CREF, Valicand LincolnOklahoma ‐Consolidated administration with Fidelityfrom previous 30 vendorsMt. HolyokeCollege ‐Chose ING, USA to replace Vanguard,TIAA‐CREF and Fidelity12
Open ArchitectureSponsors have greater credibility andparticipants have greater confidence asfunds offered in an open architectureplatform are selected based onnon‐vendor specific criteria13
NEW PARADIGMSingle Provider (certainly a single recordkeeper)Open (Quasi Open) ArchitectureRetirement Readiness – Average IncomeReplacement RatioFiduciary Standards14
TIAA‐CREF and FidelityHistoryEnhancementsChallenges15
presented by:Karl W. KunklePartnerSchneider Downs Wealth Management Advisors, LPSD Retirement Plan Solutions Division1133 Penn AvenuePittsburgh, PA ealthmanagement.com16
SMU‐ Went to Diversified from Fidelity, TIAA‐ CREF and Vanguard. 500 fund offerings to 20 Johns Hopkins ‐ 5 providers to 3 providers with set plans to move to 1 provider by 2017 Gettysburg College ‐ TIAA‐CREF as si
