Survey Findings: Higher Ed Rethinking Its Approach to Retirement Plan Offerings
Colleges and universities across the country face increasingly complex reporting and recordkeeping requirements around retirement benefits, and this appears to have been a key driver as institutions have scaled back their retirement plan provider options over the past few years.
According to findings from CUPA-HR’s 2018 Paid Time Off, Tuition, and Retirement Benefits for Higher Education Employees Survey, the percentage of institutions using more than one retirement service provider has decreased from nearly half in 2014 to one-third in 2018. Recent lawsuits have also heightened awareness of fiduciary responsibilities of higher education employers, and this may also be driving some of the decision making around retirement plans and providers.
As for retirement plans, private institutions offer fewer options than do public institutions. Half of the private institutions surveyed offer only one option, and another 40 percent offer only two; whereas 94 percent of public institutions offer two or more types of plans. The most common plan type for both public and private institutions is the 403(b). Traditional defined benefit plans and 457(b) plans are also frequent offerings among public institutions.
Says CUPA-HR President and Chief Executive Officer Andy Brantley, “It’s critically important that we provide a menu of retirement investment options for the higher education workforce, but it is also important to find the right balance of options so that our employees are not overwhelmed. Higher ed leaders must also carefully evaluate the increasing complexity of recordkeeping and compliance.”
In addition to retirement benefits, this year’s Benefits Survey also covered paid time off and tuition assistance. Here are some findings around those topics:
- More than nine out of 10 institutions have separate vacation and sick time plans rather than a combined paid time off plan.
- Only about a quarter of institutions offer paid leave for new parents, above and beyond sick and vacation leave. For those offering this paid leave, with the exception of private religious institutions, biological fathers and adoptive parents are nearly as likely as biological mothers to be offered paid parental leave.
- Nearly all (98%) institutions offer tuition benefits to full-time employees, and more than 80 percent offer tuition benefits to spouses and children of employees.
- There has been a large overall decline in the percentage of institutions offering tuition benefits for both same-sex partners and opposite-sex domestic partners from 2016 to 2018. It is possible that the Obergefell v. Hodges Supreme Court decision legalizing same-sex marriage in 2015 influenced institutions to subsequently decrease benefits for domestic partners, since same-sex partners can now become legal spouses.
About the Survey
This year’s Benefits Survey collected data on non-healthcare benefits — including paid time off, tuition reimbursement and retirement benefits — from 404 higher education institutions. Data is collected on healthcare benefits in odd years and non-healthcare benefits in even years. Data on healthcare benefits will be collected in 2018-19.
For a list of participating institutions, a report overview, information on data collected and options for purchasing the survey report and DataOnDemand, visit the Benefits in Higher Education web page.