The coronavirus has thwarted defined contribution executives efforts this year to improve plan design, offer new products and take other steps to help participants save more for retirement.
Aside from suspending or reducing employer matches, sponsors aren't going backward in their plan management. However, they aren't charging ahead as far and as fast as they had expected when they first prepared for 2020.
"Their plans have been upended for sure," said Mike Volo, senior partner for Cammack Retirement Group, Wellesley, Mass., noting that many sponsors have deferred initiatives, citing the economic damage caused by the coronavirus. "Any plan design changes have been pretty much put on hold."
Adding auto features, adding a Roth plan and launching RFPs for record keepers are among the projects that industry members said won't happen this year because employers are scrambling to cope with financial stress.
"In general, they are doing less with less," said DC plan consultant Martin Schmidt, principal at MAS Advisors, Chicago. "They say they will do what they need to do to meet their day-to-day fiduciary duties, but they are not taking on more than they have to."
Among his clients, two suspended the employer match and one put off adding auto escalation and a Roth plan. Another client decided to delay integrating the plan of an acquired company with the client's plan. The client didn't want to impose a three-week blackout period during a plan merger that could have unsettled employees in the acquired plan, he said.
Other clients deferred action on reviewing the profit-sharing formula, enhancing the match or relaxing the vesting requirements.
"If something wasn't broken right now, there is no need to deal with it until things calm down," Mr. Schmidt said.
Cammack's Mr. Volo, who specializes in 403(b) plans, said "probably" 40 colleges and universities "have reduced or suspended the match or are in the process of doing it."
Some clients are reviewing their target-date funds because these investments "didn't provide the downside protection that they expected," said Mr. Volo, referring to the fixed-income components. "Investment committees are having a more in-depth discussion about risk tolerance."
Most clients "are taking a wait-and-see attitude to see what the June 30 (quarter) data shows," he added.
When clients in 2019 planned for 2020, some had plan design changes in mind, such as adding auto enrollment or increasing the employer match, Mr. Volo said. "Plan sponsors who may have spent time and effort communicating changes to their employer contribution and adopting the CARES Act loan and withdrawal provisions are hitting the pause button on plans made pre-pandemic," he said.