Data & Research August 16, 2016

DB and DC Live Side-By-Side in the Non-Profit Space

While pension plans are far more prevalent among non-profits compared with for-profit employers, they’re still only available to a minority of non-profit staff.

Reported by

John Manganaro

More than one-third (35%) of not-for-profit employees have access to a defined benefit (DB) pension, compared to 16% percent of for-profit workers, according to LIMRA Secure Retirement Institute (LIMRA SRI) data.

Findings from the LIMRA SRI Not-for-Profit Sector Employees 2016 Consumer Survey Update show nearly 40% of not-for-profit employees report not being knowledgeable about investments or financial products—the same percentage that is not confident that their money will last through retirement.

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The data reveals defined contribution (DC) plans are the most widely available retirement planning benefit even among non-profit employers. In the education sector, 86% of employees participate in a DC plan, while 36% have access to a DB plan. Among governmental employers, DC plan participation is at 88%, and access to DB plans is 38%. DC plan participation is a little lower for non-governmental and non-education not-for-profits, at 82%, while access to DB pensions is significantly lower, at 23%.

Tied into all of this, the LIMRA SRI research finds 62% of non-profit employees anticipate Social Security will comprise a significant portion of their retirement income. More than one-quarter (27%) suggest they will work full-time beyond the traditional retirement age, while 25% plan to work part-time.

The LIMRA SRI survey shows, overall, 58% of non-profit sector employees are confident about their retirement finances. Just 12% feel very knowledgeable about finances generally, while 49% feel “somewhat knowledgeable” in this area. The remainder are split between “not at all” and “not very” knowledgeable.

Additional survey findings are reported here.