Top plan sponsor concern shifts from fees to retirement readiness
According to Fidelity’s annual plan sponsor attitudes study, the number one worry for employers is whether their retirement plan is effectively preparing employees for retirement. It’s a distinct change from 2017, when the focus was on reducing business costs related to the plan.
While last year’s potential regulatory changes were top of mind for plan sponsors, this year, the top reason they hired advisors was to help improve their plans.
Health Savings Accounts (HSAs) could increase resources available to retirement plan participants. Sixty-five percent of plan sponsors stated that retirement plans compete for funding with health and other benefits. Sponsors considered health care to be the most important benefit for the company–even before retirement benefits.
Retirement income goals are becoming more popular – seven in ten reported setting a goal for retirement income.
Auto-enrollment, which ranked as the top plan design change last year at 42 percent, fell to 26 percent. Unfortunately, six in 10 finance and HR associates participating in the survey reported concern that employees would not respond well to being automatically enrolled. However, 87 percent of employees stayed in plans with an auto-enrollment default of 5 percent or higher, and 68 percent reported being “very satisfied” with the feature.
