Challenges and Opportunities for Defined Contribution Specialists

What do plan sponsors want from the defined contribution specialists who service their plans? And how does that differ from specialists’ perception of what their clients are looking for?

Key findings

Plan sponsor support

98% of sponsors prefer working with a specialist whose focus is on retirement plans, and 85% of sponsors said they feel an increasing need for support from their specialists (up from 81% in 2021).
Sponsors are less likely to recognize the range of services their DC specialists provide, which points to a persistent communications problem.

Investments

Most sponsors agree that having an aging participant base has highlighted the need for retirement income products. 73% of sponsors said adding a retirement income solution as an important priority in the next two years; however, while many sponsors reported having plans to include retirement income options, many are not yet widely available.

Retirement income

When selecting a specialist, sponsors value guidance on retirement income investment options more than any other service offering.
One-third of participants said they are not at all confident in their knowledge of how to convert savings into income in retirement, and 88% are interested in an investment option that helps provide income during retirement.

Participant support

Only about 60% of participants said they feel somewhat or very prepared for retirement. Meanwhile, sponsors believe that 87% of participants fell into those two categories, and DC specialists believe that 71% of participants are somewhat or very prepared for retirement.
54% of participants reported that inflation will have a severe or major impact on their ability to save for retirement. 53% expect the state of the U.S. economy to have a similar effect.
37% of participants over age 50 plan on delaying their retirement due to the long-term effects of market volatility, inflation, and COVID-19.
Participants need support making financial decisions — especially those related to retirement income-related ones. 40% consider themselves “beginner” investors and 80% are interested in having access to a financial professional who can provide guidance on investment and savings decisions.
68% of participants want information and support around caregiving for an aging parent, grandparent or other family member.

Read the Detailed Insights About the Results of Our Survey

Previous waves of this survey were conducted in March 2021, December 2018, and April 2016. We expanded this year’s survey to include the sentiments of active DC plan participants for the first time.

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