"It's going to continue to be something on plan sponsors' minds" after "a little bit of a lull" following the cybersecurity guidance issued by the Department of Labor in 2021, Verdeyen said.
Now that plan sponsors spent a lot of time digesting that guidance and working cyber into their benefit plan oversight processes, "things are going to absolutely pick up again," she said.
Verdeyen added that the SPARK Institute, an advocacy group for record keepers, is expected to release a revised and expanded list of cyber controls, which she says will be an added impetus for plan sponsors to act.
Mercer also anticipates plan sponsors will look to adopt artificial intelligence in their retirement plans through their record keepers and other vendors.
Plan sponsors are looking at vendors' AI capabilities as part of the vendor assessment and selection process, Verdeyen said.
Verdeyen sees many applications of artificial intelligence in retirement plans, including the use of AI-powered chatbots at call centers and the creation of AI-generated fund fact sheets and investment commentaries for participants. AI can also be used to translate participant communications into other languages.
In the report, Mercer encouraged record keepers to migrate to the cloud and integrate AI capabilities into the analysis and provision of comparative plan information. Vendors that fail to do this will "struggle to engage plan sponsors," the report warned.
"We believe that cloud storage is something that more and more record keepers are going to be moving towards because it does have a lot of benefits in terms of the ability to more seamlessly transfer data, and that's what record keepers do," Verdeyen said.
Mercer, which recently announced plans to buy Vanguard Group's outsourced chief investment officer business, also anticipates that plan sponsors will continue to outsource components of DC plan management, if not all aspects of it.
"Outsourcing is a growing trend that is only going to grow faster in the future," Verdeyen said.
Outsourcing will be pick up traction because challenges such as cybersecurity and artificial intelligence "are getting beyond what the average investment committee member feels like they can handle to the level of expertise that ERISA expects from them," Verdeyen said.