Roughly 73 percent of employees who work at hospitals and health systems participate in a 403(b) defined contribution plan — the highest level of plan participation at healthcare organizations in the past 10 years, according to a study from the American Hospital Association and retirement plan firm Diversified.
The study surveyed 180 hospitals and health systems on their retirement program plans. In 2006, only 58 percent of hospital industry employees were in a DC plan, the lowest level within the past 10 years.
Here are some other key findings from the study:
• The percentage of hospitals and health systems that offer a matching contribution in their DC plan has almost doubled in six years, from 44 percent in 2006 to 79 percent in 2012.
• Although defined benefit plans are still offered at 42 percent of surveyed institutions, those organizations said the DB plans are frozen to either new employees or all employees.
• DC participants at healthcare organizations contribute an average of 5 to 7 percent of their salary to their DC plan annually.
• The investment markets hammered retirement plans after the economic collapse of 2008. In 2009, the average annual contribution from healthcare employees to their DC plan was $3,505, compared with $5,205 in 2006. The number has improved steadily, as the annual contribution amount stood at $4,005 this year.
• Thirty-eight percent of hospitals and health systems use automatic enrollment for DC participants.
The study surveyed 180 hospitals and health systems on their retirement program plans. In 2006, only 58 percent of hospital industry employees were in a DC plan, the lowest level within the past 10 years.
Here are some other key findings from the study:
• The percentage of hospitals and health systems that offer a matching contribution in their DC plan has almost doubled in six years, from 44 percent in 2006 to 79 percent in 2012.
• Although defined benefit plans are still offered at 42 percent of surveyed institutions, those organizations said the DB plans are frozen to either new employees or all employees.
• DC participants at healthcare organizations contribute an average of 5 to 7 percent of their salary to their DC plan annually.
• The investment markets hammered retirement plans after the economic collapse of 2008. In 2009, the average annual contribution from healthcare employees to their DC plan was $3,505, compared with $5,205 in 2006. The number has improved steadily, as the annual contribution amount stood at $4,005 this year.
• Thirty-eight percent of hospitals and health systems use automatic enrollment for DC participants.
More Articles on Hospital Pension Plans:
Halifax Health Reaches Compromise on Pension Plans
Employees Sue Truman Medical Center in Kansas City Over Pension Plans
Hospital CFO Panel: How Are You Approaching Your Fiscal Strategy Right Now?