403(b) Curriculum Library

Key Findings From the Fourth Edition of the Higher Education Retirement Plan Survey

Cammack Retirement Group has completed the fourth edition of our survey of U.S. colleges and universities' retirement plans to measure trends in the retirement marketplace and the needs of the nation's leading higher education institutions. Over 100 institutions, representing 536,000 employees and a combined enrollment of over 1,565,000 students responded to the survey.

Cammack Retirement's Higher Education Retirement Plan Survey began in 2010 to address the lack of benchmarking information specific to higher education retirement plans. The survey results offer plan sponsors the critical benchmarking information and emerging trend analysis they need to make strategic decisions and manage fiduciary risk. Key findings include:

  • 92% of plan sponsors utilize three or fewer vendors and appear to be satisfied with their consolidation efforts, as the number of respondents reporting an increase in vendors is in the single digits and the number of requests for proposals (RFPs) to solicit a consolidated plan vendor remained flat.
  • Fee disclosure regulations have created greater awareness of plan costs. While RFP numbers stayed level, plan sponsors have increased their understanding of the contractual relationship with their vendors, enabling them to negotiate improved contract terms; a practice that is beneficial both for participants and the plan itself. Over half of the survey respondents have negotiated fees in the past 24 months and nearly two-thirds now have an expense reimbursement account, a favorable plan feature that only 11% of higher education plan sponsors had in 2011.
  • The streamlining of investment lineups continues, with 65% of plans offering fewer than 50 investments, up from 62% in 2012.
  • There has been an even greater movement away from vendor proprietary funds to more of an open-architecture platform, with only 54% of respondents reporting a proprietary model, down from over two-thirds in the 2012 survey.
  • More than 90% of respondents offer target date funds, which are designed for the increasing number of participants who have little desire to make their own investment elections.
  • Voluntary plan participation is down slightly, most likely attributable to continued participant concerns regarding the economy. Given this trend, it is not surprising that addressing the voluntary participation issue remains a top concern for plan sponsors.
  • Employer contribution amounts have remained mostly flat year-over-year. The formula remains more generous than other non-profit market segments, with an average level basic/core contribution of 6.8%.
  • While plan sponsor awareness and adoption of best practices continues to increase, so does the use of retirement plan advisors; and these trends likely go hand-in-hand. Nine out of ten respondents now utilize some sort of investment advisor, a dramatic increase from 71% in 2011 and 77% in 2012.

We sincerely appreciate those institutions who participated in the survey. Complete survey reports will be distributed to participating instituations in the coming weeks. If you did not participate, we encourage you to respond in the future, as this unique benchmarking opportunity is available only to survey participants. For more information, or to participate in the 2015-2016 survey, please contact Isaiah Davis, Director, Business Development at idavis@cammackretirement.com or 781-997-1424.

Note: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Investment products available through Cammack LaRhette Brokerage, Inc.
Investment advisory services available through Cammack LaRhette Advisors, LLC.
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