The 15th edition of Fidelity's Plan Sponsor Attitudes Survey, based on responses from 1,174 defined contribution plan sponsors, provides a comprehensive snapshot of the current retirement plan landscape. The survey highlights key trends and challenges facing plan sponsors, along with the growing role of retirement plan advisors.
- Plan Sponsor Priorities: The survey reveals that plan sponsors are primarily focused on employee savings goals (77% of top goals), with attracting and retaining top talent also a significant priority (30%).
- Advisor Utilization Remains High: 90% of plan sponsors currently work with an advisor. This highlights the increasing need for expert guidance in managing complex retirement plans.
- Advisor Satisfaction is High: Plan sponsors are highly satisfied with their advisors, with 81% reporting satisfaction and 78% agreeing their advisor provides good value.
- Advisor Expertise Drives Results: The survey emphasizes the growing importance of advisors' expertise in areas such as plan design, investment menu analysis, and navigating complex regulations.
- Focus on Plan Design: Plan sponsors are actively reviewing and adjusting their plan designs to enhance participant outcomes. The top plan design changes in the past year include increasing matching contributions, raising auto-enrollment rates, and adding automatic increases to deferral rates.
- Plan Sponsors Seek Advisor Expertise: A significant portion of plan sponsors (39%) plan to conduct an advisor search to gain a better understanding of advisory costs and services, emphasizing the value of a comprehensive understanding of the market.
- Importance of Participant Education: The survey highlights the increasing focus on providing robust education programs for plan participants, especially in the area of target date funds.
- Employee Turnover and Retirement Readiness: Employee turnover remains a challenge for many companies (48% report more than 30% of their employees hired in the past 12 months). Furthermore, the survey reveals that only 50% of employees retire on time, highlighting the need for enhanced retirement planning and education.
- Investment Menu Evolution: The survey points to a growing trend towards increasing the number of Collective Investment Trusts (CITs) and adding more investment options, particularly in areas such as sustainable investing, target date funds, and inflation-protected investments.
- Digital Experience Matters: Plan sponsors are increasingly prioritizing the digital experience offered by recordkeepers, with a significant percentage (50% of those who work with an advisor) indicating it's "extremely important" in their decision-making process.
Key Takeaways for Retirement Plan Sponsors:
- Embrace Expert Guidance: The survey reinforces the importance of working with a qualified retirement plan advisor to navigate the complex regulatory landscape, optimize plan design, and ensure participant outcomes are maximized.
- Prioritize Plan Design: Focus on designing a plan that aligns with your company's goals, provides flexibility for employees, and effectively prepares them for a secure retirement.
- Invest in Education: Provide ongoing education for both plan sponsors and participants, covering crucial topics like investment management, plan features, and retirement planning strategies.
- Leverage Technology: Pay close attention to the digital experience offered by your recordkeeper and prioritize technology solutions that enhance participant engagement and access to plan information.
- Stay Informed: Continuously review your plan design, fee structure, and investment options to ensure they remain competitive and meet the evolving needs of your workforce.
Source: Fidelity Investments, "Plan Sponsor Attitudes Survey," 15th Edition, 2024.
