Alan Cole Discusses Record 403(b) Participation Rates, But Urges Improved Participant Education

Participation rates at nonprofit 403(b) plans have continued to reach record levels, according to data from the Plan Sponsor Council of America.

This surge in participation is due to automatic enrollment, better communication, and employer-matching contributions. Nearly one-third of nonprofit organizations now automatically enroll new hires into their 403(b) plans, up from previous years.

However, it’s important to note that increased participation doesn’t necessarily mean workers are saving enough for retirement. In fact, Alan Cole, Vice President of Retirement Plan Sales, says most plan sponsors are looking at other methods such as education and advice to help drive better engagement.

In a recent interview with PLANSPONSOR, Cole shares the importance of continued education and communication to improve retirement readiness:

Explaining how to properly use retirement plans is not unique to 403(b) plans. Yet, for developing an education strategy, tailoring aspects to the demographics of sponsors is useful. When I’m working on a [retirement plan of a] college and university, they’re typically very focused on education, so when developing their education strategy, it resonates with the employee, [and] they’re able to understand, ‘I’m here to learn; I teach.
 
— Alan Cole, Vice President of Retirement Plan Sales, OneDigital

Cole says Retirement plan education is more impactful in that environment. “If you have a foundation, that may or may not resonate with everyone. When developing an education strategy, sponsors can study their employee population’s level of engagement with the plan’s recordkeeper or adviser.”

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For additional resources on this topic, check out: What Every Plan Sponsor Should Know About Having a Customized Financial Wellness Solution .

Investment advice offered through OneDigital Investment Advisors LLC.