CLC Issues Higher Education Retirement Plan Survey Findings
Date: December 6 2012
New York, NY & Wellesley, MA - December 6, 2012 - Cammack LaRhette
Consulting, a leader in higher education retirement plan consulting,
issued the findings of its third annual survey of U.S. private colleges
and universities' retirement plans today. The findings reveal that
simplifying investment options is a top challenge for plan sponsors and
that heightened fiduciary concerns have led to an almost 100% increase
in the utilization of consultants and advisors in the last two years.
With over 100 of the country's leading private colleges and universities
responding to the survey, the results represent 325,000 employees and a
combined enrollment of over 900,000 students. The comprehensive survey
is designed to provide plan sponsors and investment committees with the
critical benchmarking information and emerging trend analysis they need
to make strategic retirement plan decisions.
Key findings include:
* Plan sponsors continue to seek ways to facilitate
administration and simplify decision making for participants.
Consolidating or reducing the number of vendor products (vendors and
investment options) being offered to employees was ranked as the top
challenge for plan sponsors, and more than half noted that changing the
number of investments in their plan was a key initiative for the
upcoming year. 63% of plans offer 50 or fewer fund options and 84%
utilize only one or two vendors.
* Despite the focus on simplifying options for employees, plan
sponsors are not convinced that the new fee disclosure regulations will
help participants make investment decisions. 25% of responders believe
the regulations will actually make it more confusing for participants,
whereas only 9% believe it will make it easier.
* Heightened fiduciary concerns have made the use of consultants
and advisors the norm, rather than the exception. 64% of plan sponsors
utilize a consultant or investment advisor, up from just 33% in 2010.
* Excessive administrative costs have led to an increasing focus
on plan expenses, as indicated by the 19% who responded that changing
how plan expenses are paid is a key initiative, up from 9% in 2011 and
2% in 2010.
* The use of expense reimbursement accounts, a mechanism that
allows the plan sponsor to typically decrease fees by capturing revenue
in excess of their recordkeeping costs, has jumped from 11% in 2011 to
43% in 2012.
* 22% of plan sponsors now have, or plan to implement, an
automatic enrollment feature.
* Employer contributions to higher education retirement plans
remain robust and largely unchanged from 2011. The majority of
universities in the study indicated an immediately vested employer
contribution of 8% of pay or greater, through a combination of base and
"In the competitive higher education retirement plan market,
understanding peer benchmarking is essential," says Jeff Levy,
Retirement Practice Leader at Cammack LaRhette Consulting. "We hope the
survey results serve as a tool for plan sponsors as they look to offer
the most effective retirement plan program."
About the Survey:
Now in its third year, the Cammack LaRhette's Higher Education
Retirement Plan Survey provides industry-leading insights into the
dynamic retirement plan landscape of private colleges and universities.
Part of Cammack LaRhette's proprietary research, the survey results
offer plan sponsors the critical benchmarking information and emerging
trend analysis they need to make strategic decisions and manage
fiduciary risk. As a service to the higher education community, the
survey is commissioned and paid for by Cammack LaRhette and the survey
report is offered at no cost to participating organizations. For more
information, or to participate in the 2013 survey, please contact Cara
Belmosto at firstname.lastname@example.org<mailto:email@example.com> or
About Cammack LaRhette:
Cammack LaRhette is a full service employee benefits consulting firm
specializing in non-profit organizations. Serving retirement plans
since 1958 as a leader in the planning, execution, and strategic
management of these plans, Cammack LaRhette provides investment
advisory, consulting and compliance services on programs with assets
totaling more than $26 billion.=
Cammack offers industry-leading insights and benchmarking through the
403(b) Curriculum, a highly targeted program designed specifically for
college and university administrators. Our extensive thought leadership
has been included in many of the leading industry publications. Cammack
LaRhette has also sponsored and exhibited at various industry events and
led numerous webinars and seminars.
As a pioneer in the field, Cammack LaRhette's seasoned team possesses
the focus, expertise, and experience to deliver strategic and successful
solutions to help clients achieve the greatest return on their employee
benefits and human resources investments. Our proven approach, along
with our commitment to client partnerships, has led to our 98 percent
client retention rate. For more information about Cammack LaRhette, call
212-227-7770 or visit www.clcinc.com