Cammack Retirement Group Finds More Plan Sponsors Adopting Industry Best Practices
WELLESLEY, Mass., Oct. 14, 2014 /PRNewswire/ -- Higher education retirement plan sponsors have made great strides in 2013 and 2014 toward enhancing their retirement plan designs in order to increase participant success, lessen their administrative burden, and minimize fiduciary risk, according to the fourth edition of the Higher Education Retirement Plan Survey from Cammack Retirement Group ("Cammack Retirement").
The survey, completed by over 100 private institutions representing 536,000 employees and 1,535,000 students, found that nine out of ten respondents now utilize some sort of investment advisor, an increase from 71% in 2011 and 77% in 2012. In addition, nearly half of advisors serve as plan fiduciaries, up from 25% in 2010.
Another key finding involves investment streamlining, where 65% of plans now offer fewer than 50 investments. Streamlining investment lineups, a trend that has increased year-over-year, simplifies decision making for participants and the investment monitoring process for plan sponsors. Of related importance, more than 90% of respondents offer target date funds, designed to provide a simplified investment solution that becomes more conservative as the target date approaches and utilized by an increasing number of participants who have little desire to make their own investment decisions.
While a growing number of plans are incorporating best practices, the survey uncovered several areas in which plans can be further optimized. The use of automated plan features continues to rise, but only 22% have, or plan to have, an automatic enrollment provision. Of those, only 36% have incorporated automatic escalation.
In addition, the majority of plan sponsors do not limit the number of outstanding loans a participant may have, a concern for both compliance and diminished participant account balances. Investment policy statements, strongly suggested by the Department of Labor, are utilized by only 60% of fiduciary committees.
"Overall, we're very pleased to see plan sponsors continue to adopt industry best practices, specifically in the areas of investor and vendor consolidation as well as fiduciary behavior," said Jeff Levy, managing partner at Cammack Retirement, and co-author of the survey. "We believe that the record-high use of advisors and the increasing awareness and adoption of best practices go hand-in-hand."
The 2013-2014 Higher Education Retirement Plan Survey, the largest of its kind, was undertaken in order to measure trends in the retirement marketplace and offer the information and tools necessary for plan sponsors to make strategic decisions and manage fiduciary risk. The survey began in 2010 to address the lack of benchmarking information specific to higher education retirement plans. Cammack Retirement also offers industry-leading insights through its "403(b) Curriculum," a program designed specifically for college and university retirement plan fiduciaries.
About Cammack Retirement Group
Serving retirement plans since 1958, Cammack Retirement (formerly Cammack LaRhette Consulting) provides investment advisory, consulting, and compliance services to programs with assets totaling more than $62 billion. It takes a comprehensive approach to retirement plan management, recognizing the importance of key components such as investment selection, fiduciary oversight, plan design, compliance, and participant outcomes. Cammack Retirement Group services plan sponsors spanning the country, with offices New York City and Wellesley, Massachusetts. For more information, please visit http://www.cammackretirement.com/.
SOURCE Cammack Retirement Group
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