A majority (72 per cent) of plan sponsors believe their retirement savings plan is meeting its goals this year, up from roughly 66 per cent in 2020, according to a new survey by Fidelity Investments Inc.
While 68 per cent said their employees are saving enough for retirement — up from 59 per cent in 2020 — 86 per cent believe at least some members are delaying retirement due to a savings shortfall and 60 per cent believe the coronavirus pandemic has had an impact on employees’ retirement decisions. Only 16 per cent of plan sponsors said they reduced the employer matching contribution to their retirement savings plan over the past two years.
The survey also found 88 per cent said they’re making changes to their investment menus and 82 per cent are making changes to their plan designs. Although advisor satisfaction (73 per cent) and value (69 per cent) remained high in 2020, advisor value perception was down 10 per cent year-over-year among smaller plans. The survey noted the top three drivers of advisor value for plan sponsors are improving employee outcomes, improving employee satisfaction and providing financial advice and guidance to participants.
A third (34 per cent) of respondents said they’re looking to change advisors — up from 16 per cent in 2020 — citing better employee communication and education as their top reason, followed by lower stated fees, more retirement expertise and a better investment lineup.
Almost half (46 per cent) of respondents said they also want their advisor to have more expertise in helping minimize costs, as well as selecting and monitoring investment options for the plan (44 per cent) and keeping them informed on regulatory changes and how to implement them (42 per cent).
Roughly three-quarters (71 per cent) said their advisor had spoken to them about a financial wellness program and 62 per cent have implemented one in the past two years. Of plan sponsors who’ve implemented these programs, 73 per cent reported a strong impact for employees, up from 61 per cent last year.