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By most accounts, Americans are not saving enough for retirement and the probability of millions of future retirees running out of money is high. Plan participant reliance on employer-sponsored retirement plans as a top source of retirement savings has never been greater. This presents a significant pressure point that 401(k) plan providers face in an industry that has become highly scrutinized from a legal and regulatory standpoint.
Additionally, plan sponsors have high expectations of their plan providers to offer outstanding service quality and competitive fees without sacrificing strong investment option performance. Alternatively, plan sponsors feel the pressure as internal company directives demand offering a successful 401(k) plan with greater participant engagement using fewer resources and smaller budgets. As such, plan sponsors are focused on cost reduction more than ever and cite plan administration fees as the top reason for switching record keepers. However, despite the demand for cost containment, significantly more plan sponsors indicate that adequately preparing participants for retirement is a top three area of focus for 2016.
One Size Does Not Fit All DC Sponsors is a new white paper which investigates the role plan sponsors play in participant retirement readiness, and the features and services plan sponsors currently provide and anticipate adding in the near future to ensure that their participants are adequately prepared for retirement. It begins with reviewing what plan sponsors perceive regarding primary ownership of the responsibility for participant retirement readiness, and then examines current plan features available to participants along with the automatic plan features that are likely to be adopted in the next 12 months. Next, it focuses on investment menu offerings and anticipated changes as they relate to retirement preparedness. The white paper concludes with a review of the various types of advice delivery models being offered and most likely to be adopted to assist plan participants with their retirement savings strategy.