Retirement plan sponsors and participants differ in their views on the importance of environmental, social and governance investment options in defined contribution plans, according to research by American Century Investments.
Ninety percent of sponsors who offered or are considering offering ESG investments believe participants would be interested in them when only 37% of participants in fact were, the research found.
What's more, participant interest in ESG options hinged on whether performance was comparable to that of the average product, according to the study.
"It will be interesting to track employee sentiment in the future and compare their interest in ESG choices down the road as individuals become more familiar with the term," said Diane Gallagher, vice president of value-added programs at American Century, in a news release.
Plan sponsor and participant views diverged in other ways. Plan sponsors, for example, thought that some 28% of participants wanted to be left alone when it came to help with retirement savings when in reality more than 80% of participants wanted a least a "slight nudge" from their employers.
"Employers underestimate the level of help employees want," Ms. Gallagher said. "We tend to listen to the 'squeaky wheel,' the person who says, 'I've got this,' but most workers want help; they want guardrails."
The annual study, conducted in the first quarter, surveyed 500 defined contribution plan administrators and 1,500 full-time workers ages 25 to 65.