The majority (95 per cent) of U.S. 401(k) plan sponsors say they intend to change their plan design by the end of the year, according to a new survey by Fidelity Institutional.

The survey, which polled more than 1,300 employers, found a quarter said they plan to increase their matching contribution (26 per cent) and automatic enrolment deferral rate (26 per cent) as well as offering an income replacement fund (26 per cent).

Plan sponsors said they’re also investigating changes to investment menus, including offering collective investment trusts (29 per cent) or increasing the number of collective investment trusts (28 per cent) or index funds (28 per cent).

Read: Report calls for more illiquid assets in DC pension plans’ target-date funds

More than two-thirds (72 per cent) of plan sponsors said their employees are saving enough for retirement, up from 70 per cent in 2022. Among these plan sponsors, 71 per cent said their auto-enrolment deferral rate and matching contribution supports sufficient retirement savings.

When asked about competing financial priorities that impact employees’ retirement savings, respondents cited factors such as living expenses (47 per cent), health-care costs (38 per cent) and lack of discipline in saving for retirement (36 per cent).

Although three-quarters (74 per cent) of employers said their plan is meeting its objectives, respondents expressed concerns about their plan’s impact on attracting and retaining top talent (27 per cent), effectively preparing employees for retirement (26 per cent) and reducing retirement plan costs for employees (16 per cent).

“While we see the relationships between plan sponsors and plan advisors evolving, employee communication and education remains at the forefront, with sponsors looking to advisors to offer a more holistic experience,” said Liz Pathe, head of defined contribution investment sales at Fidelity Institutional, in a press release. “With plan designs, investment lineups and the benefits landscape all evolving, advisors have an opportunity to showcase their impact and service-centred mindset.”

Read: 43% of U.S. DC pension plan sponsors offering auto-escalation: survey