PLANADVISER - January/February 2019 - 8

data points
403(b) Plans Tuned In to Education
Nonprofit and public plans are the most apt to support efforts to learn
A
s 403(b) plans are offered by
educational institutions, nonprofits,
hospitals and other such
organizations, it may come as no surprise
that they are more likely than
401(k), 457 and other types of defined
contribution (DC) plans to foster participants'
education, according to the
" 2019 PLANSPONSOR Defined Contribution
Industry Report-403(b) Plans. "
For instance, 56.3% of 403(b)
plans offer their employees a student
loan repayment program, compared
with just 40.9% of plans in all industries,
and nearly one in five, 19.5%,
make an employer contribution to a
529 college savings plan-more than
double the percentage of DC plans in
all industries.
Additionally, 8.0% of 403(b) plans
give tuition reimbursement for higher
education, 8.7% offer student loan
refinancing programs, and just onethird
(35.0%) neglect to offer any kind
of assistance at all with higher or
continuing education, compared with
6.1%, 2.6% and 51.5% of DC plans in all
industries, respectively.
The report also showed that permitting
loans from defined contribution
plans is nearly universal, with 96.3% of
DC plans in all industries offering this
feature. This is only slightly less true
for 403(b) plans, with 93.1% making
loans possible. And the average loan
balance for 403(b) plans and DC plans
overall are essentially on par, with the
former having an average balance of
$9,896, and the latter, $10,257.
A
relatively
new development
among defined contribution plans
has been to let separated employees
continue making loan payments after
they have left the company. This is a
further area where 403(b) plans differ
from all industries' DC plans and indicates
more of a laissez-faire attitude
on this point; 48.3% of 403(b)s allow
loan payments to continue past termination,
compared with 26.1% of plans
in all industries. -Lee Barney
Assistance With Higher/Continuing Education
Plans in All Industries
Employer contributions to 529 plan
Tuition reimbursement for higher education
Student loan repayment
Student loan refinancing
None
7.90%
6.10%
40.90%
2.60%
51.50%
Does the Plan Include a Loan Provision?
Yes
No
Unsure
Plans in All Industries
96.30%
8.10%
0.70%
403(b) Plans
93.10%
6.20%
0.70%
What Is the Average Loan Balance for Participants
With Outstanding Loans?
Plans in All Industries
$10,257
403(b) Plans
$9,896
Does Your Plan Allow Separated Employees to Continue to
Make Loan Payments After Termination?
n Yes
n No
n Unsure
11.9%
26.1%
Plans in
All Industries
61.9%
Source: " 2019 PLANSPONSOR Defined Contribution Plan Industry Report: 403(b) Plans "
403(b) Plans
32.0%
48.3%
19.7%
403(b) Plans
19.50%
8.00%
56.30%
8.70%
35.00%
6 | planadviser.com January-February 2019
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PLANADVISER - January/February 2019

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