Survey: About 7 in 10 403(b) Plans Use Target-Date Funds

By Staff Report

May. 24, 2011

Target-date funds were used as investment options by 69.1 percent of 403(b) plans in the 2010 plan year, up from 51.2 percent a year earlier, according to a Profit Sharing/401k Council of America survey sponsored by Principal Financial Group.

Last year, the most common default options for 403(b) plans were target-date funds, at 34.2 percent of all plans, and lifestyle funds, at 28.9 percent, according to a news release describing the survey. The 403(b) plans are retirement plans similar to a 401(k) but offered by not-for-profit organizations, such as universities and some charitable organizations, rather than corporations.

“People like what target-date funds do,” said David Wray, president of the Chicago-based Profit Sharing/401k Council of America, in an interview, referring to the funds’ changing asset allocations over time.

Also, 12.3 percent of 403(b) plans had an automatic enrollment feature during the 2010 plan year, up from 11.5 percent.

The average participation rate for the 2010 plan year was 74.7 percent, vs. 75.8 percent for the 2009 plan year.

The survey said 22.6 percent of plans allow loans only for hardship purposes, and 49.5 percent allow loans for any reason. The corresponding percentages in 2009 were 24 percent and 48.7 percent.

The online survey of 712 sponsors for the 2010 plan year was conducted in February and March, and the number of respondents was 29 percent higher than the survey of 403(b) plans for the 2009 plan year.   

Filed by Robert Steyer of Pensions & Investments, a sister publication of Workforce Management. To comment, email


Stay informed and connected. Get human resources news and HR features via Workforce Management’s Twitter feed or RSS feeds for mobile devices and news readers.

What’s New at

blog workforce

Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.

Book a call
See the software

Related Articles

workforce blog


What is Earned Wage Access (EWA)? A Few Considerations

Summary Earned wage access (EWA) programs are an increasingly popular way for employees to access their...

benefits, earned wage access products, payroll, time and attendance

workforce blog


EEOC says that employers legally can offer incentives to employees to get vaccinated in almost all instances

If you’re an employer looking to get as many of your employees vaccinated as possible, you can rest eas...

ADA, CDC, COVID-19, EEOC, GINA, pandemic, vaccinated

workforce blog


Fixing some common misconceptions about HIPAA

Ever since the CDC amended its COVID-19 guidance to say that the fully vaccinated no longer need to wea...

COVID-19, health care, HIPAA, human resources, wellness