Record keepers adjust quickly to work-from-home reality – survey

Following stay-at-home rules and social distancing guidelines, 98% of the record-keeping industry is now working from home, up from 20% in January, according to a survey released Tuesday from the SPARK Institute and the Defined Contribution Institutional Investment Association.

"The shift to work-from-home has gone very smoothly because our industry has been by and large having certain employees work from home for well over a decade," said Tim Rouse, executive director of the SPARK Institute.

To address the increase in employees working remotely, record keepers have responded with an increased focus on cybersecurity, supplying employees with necessary technology and online team calls, according to the survey, which was conducted last week and garnered responses from 21 firms on questions related to the COVID-19 crisis and implementation of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act.

More than 80% of the record keepers surveyed have already updated their systems and procedures to accommodate the CARES Act and another 9% should be updated within a week, the survey found. Notably, one of the CARES Act's provisions permits 401(k) plan participants to withdraw up to $100,000 from their accounts. To facilitate that type of request, record keepers have to update their systems, Mr. Rouse said.

Most participants are not shifting their investments but are looking for loans or hardship withdrawals, the survey said. The groups did not share a specific figure.

Warren Cormier, executive director of the retirement research center at DCIIA, said it's been impressive to see how quickly the record-keeping industry has made adjustments to assist clients and participants.

For plan sponsors, a third of those previously considering a request for proposal process have decided to put it on hold, the survey found. Moreover, the record keepers surveyed indicated that according to their data, about half of plan sponsors are considering reducing employer contributions to their retirement plans until the crisis is over.

And with so many of their employees now working from home, some plan sponsors are concerned with managing paperwork and required document signatures, payroll and staffing issues, and a lack of necessary technology infrastructure, according to a news release highlighting the survey results.

Lew Minsky, president and CEO of DCIIA, said in a statement that he hopes both plan sponsors and participants strive to maintain a long-term view in their retirement planning.

"Now more than ever, DCIIA remains committed to working with plan sponsors and the broader retirement savings industry in highlighting ways to close the retirement savings and security gap, an issue that is being highlighted now more than ever as the pandemic reveals systemic gaps in emergency savings and other financial well-being issues," Mr. Minsky said.