Before the pandemic struck, sponsors of U.S. defined contribution plans were realizing the benefits of calling outside assistance for guidance. Even more seem to be doing so today. Relying on consultants and financial professionals for the very specialized help they provide can help sponsors weigh options. What’s more, it may
provide a level of protection for those with authority over the plan, and may improve the plan’s performance.
The 2020 Inside the Minds of Plan Sponsors survey found that 58% of plan sponsors rely on a consultant or financial professional — up 16% from the prior survey. One benefit of expert guidance seems to be increased awareness of fiduciary responsibility: the survey found that 70% of plan sponsors now identify themselves as fiduciaries, up from 58% in the prior report. There was a similar increase in the number of plan sponsors who said it is “very important” to have a consultant to the plan acting as a fiduciary; 54% made that statement in 2020, compared to 37% in the earlier survey.
For plan sponsors, a lack of knowledge about how much employees need to save for retirement tops the list of worries, with 52% citing it as number one. Their second- highest concern, at 49% of plan sponsors, is that participants don’t understand their investment options. These are, of course, areas where outside financial professionals can help.
To read the latest Inside the Minds survey from Alliance Bernstein, click here.