As employees continue to delay retirement, more plan sponsors are looking to advisers for help in boosting employee participation and contribution rates to defined contribution plans, according to a study by Fidelity Investments.
Ninety-three percent of DC plan sponsors today work with an adviser, up from 68% in 2008, the survey found.
"More plan sponsors are seeing the value of working with advisers," said Jordan Burgess, head of specialist field sales overseeing defined contribution investment-only sales at Fidelity Institutional Asset Management, in a news release.
Mr. Burgess added that plan sponsors are increasingly pressing advisers for help in achieving the twin employer and employee goals of getting workers to retire on time, a challenge for many plan sponsors. Ninety percent of employers reported that they have had employees work past their desired retirement date, with 73% acknowledging that there are costs associated with the delayed retirements, including increased benefit costs (37%), reduced mobility for younger employees (33%), challenges for strategic workforce planning (31%) and lower productivity (27%).
The study showed that the majority of plan sponsors — 63% — are satisfied with their advisers, up from 19% in 2010. Some plan sponsors, nevertheless, are looking to switch advisers with 18% doing so this year.
Most plan sponsors — 75% — reported making a change to their plan design or investment menu in the past two years. Increasing the match (26%) and adding a match (24%) were the top plan design changes, while increasing the number of investment options was the top menu change. Plan sponsors are also reviewing plan performance more often, with a shift away from annual reviews (14% in 2019 vs. 27% in 2018) to quarterly reviews (45% in 2019 vs 38% in 2018).
The study was conducted in collaboration with Harris Insights & Analytics, an independent market research company, which conducted an online survey in February of 1,252 plan sponsors on behalf of Fidelity.
