Fact-Based Trends From Cogent Reports™
Plan sponsors are increasingly looking for ways to encourage employee engagement with the 401(k) plan. This year two trends are rising to the top. Compared with previous years, more plans are providing employer matching contributions, thus providing an immediate incentive for participants who actively contribute to the plan. In addition, a relatively new trend shows nearly four in ten employers are considering a financial wellness program to help employees address more immediate financial priorities. In fact, the interest in financial wellness programs far outweighs interest in automatic plan features that are more narrowly focused on retirement accumulation as the end goal.
Overall, just 16% of plan sponsors currently offer a financial wellness program for their employees. But importantly, nearly four in ten (38%) say they are likely to consider adding such a program in the future. A view by plan size reveals that the larger employers are leading the charge, as more than one-third (36%) of Large-Mega plans currently offer a financial wellness program. Yet interest in adding a financial wellness program is relatively strong and consistent across plan size segments, with 37% of Micro plans, 43% of Small-Mid plans and 44% of Large-Mega plans open to considering this level of assistance for their employees. These findings suggest that the opportunity to strengthen client relationships is greatest for providers and advisors who think holistically about the financial health and security of the employees they serve.
Retirement Planscape®, an annual assessment of the plan sponsor market which identifies competitive strengths and weaknesses in brand, loyalty and key experience metrics, published in May. For more findings from the report, download the webinar, Upping Engagement with 401(k) Plans.