403(b) or 401(k) Plans
A unique service rarely provided by investment managers:
- Features individual meetings with each employee twice a year to review their retirement plans.
- Provides the organization with an effective and efficient structure for managing employee retirement plans.
- Ongoing assistance facilitates plan adjustments as needed over time.
Provides financial planning and assistance to employees:
- Onboarding and educating employees.
- Review of retirement plan investments.
- Advice on investment allocation.
- Engagement with the plan administrator.
Fairlight works with retirement plan administrators and record-keepers to balance the right mix of investments, employee education, and service to nonprofit and for-profit organizations. Whether you have a 403 B, 401k, Profit-Sharing, or Cash Balance Plan structure, Fairlight is here to serve you. We provide 3(38) investment management for employee retirement plans, which allows us to create default investment selections for participants.
Step 1: Review and assess the current plan’s investments.
Step 2: Propose three easy tiers of investment allocations from novice to experienced investor–satisfying the broadest range of employees.
Step 3: Participant onboarding and education through online tools, materials, and seminars available for distance learning and in-person training.
To learn more about the Fees for Retirement Plans for Nonprofits, click here.
FAQ: Retirement Plans For Nonprofits
What is the best retirement plan for nonprofit employees – 403(b) vs 401(k)?
There isn’t a single “best” choice for every nonprofit. Both 403(b plans for nonprofits and 401(k plans for nonprofits allow pre-tax and Roth contributions, employer matching, automatic enrollment, and a wide range of investment options. A 403(b) is more common for charities, schools, and religious organizations, while a 401(k) is often used by nonprofits that operate more like traditional businesses. The better fit depends on the organization’s size, payroll systems, desired employer match, and the flexibility offered by the retirement plan provider.
How do we start a retirement plan for a small nonprofit with only a few employees?
Starting a retirement plan for a small nonprofit typically begins with clarifying your goals, budget, and desired level of employer contribution or match. From there, a financial advisor can coordinate with retirement plan administrators and record-keepers to help set up a 403(b), 401(k), or other retirement plan structure that fits your size. Advisors can then review and select the investment lineup, create simple tiers of investment allocations, and establish an education and onboarding process so employees understand the new nonprofit retirement plan and how to use it.
What does it mean to have a 3(38) fiduciary investment manager for our nonprofit 403(b) or 401(k) plan?
A 3(38) fiduciary investment manager for a nonprofit retirement plan is a third party given legal authority to select, monitor, and replace the investments offered in the plan. For a nonprofit 403(b) or 401(k), this means the 3(38) manager, not the board or staff, is responsible for deciding which funds are on the plan menu and when to replace them. The nonprofit still retains oversight responsibility for hiring and monitoring the 3(38) manager, but day-to-day investment selection and documentation of that process is handled by the fiduciary manager. This arrangement is often used when boards want professional support for investment decisions and a clearer division of responsibility.
What should our nonprofit board know about fiduciary responsibility for employee retirement plans?
When a nonprofit sponsors an employee retirement plan such as a 403(b) or 401(k), the organization and its designated fiduciaries have legal responsibilities under ERISA or similar regulations. These responsibilities include acting in the best interest of participants, following the plan document, monitoring plan fees and service providers, and ensuring that investments are selected and reviewed using a prudent, well-documented process. Boards and committees should understand who is formally serving as a fiduciary, how often the plan is reviewed, how decisions are documented, and what education or support fiduciaries receive to stay informed about their duties.
How can nonprofits improve retirement plan participation and employee education in a 403(b) or 401(k)?
Nonprofits often improve participation and engagement by combining good plan design with clear communication. Automatic enrollment and automatic escalation can increase the number of employees saving and the amounts they contribute over time. Offering a simple, understandable investment lineup, including a default option such as a target date fund, helps employees who don’t want to choose every detail. Regular education, through new-hire onboarding, periodic workshops, and access to one-on-one conversations, gives employees a chance to ask questions about the 403(b) or 401(k), learn the basics of investing, and see how the plan fits into their broader financial goals.
