12th Fidelity® Plan Sponsor Attitudes Study
Finds:
- 72% of Plan Sponsors Believe their Plan is
Meeting its Goals this Year, Up from 2/3 in 2020
- Only 16% of Plan Sponsors Reduced the Employer
Matching Contribution over the Past Two Years, Despite Pandemic
Challenges
- 34% of Plan Sponsors are Looking to Change
Advisors, Up from 16% in 2020
Fidelity Investments®, one of the industry’s most diversified
and largest financial services companies, today announced the
results of the 12th edition of its Plan Sponsor Attitudes Study,
which revealed that in the midst of the COVID-19 pandemic, there
was a heightened demand for advisor guidance and expertise as
workplace retirement plan sponsors became increasingly focused on
supporting their employees.
Fidelity’s study revealed that plan sponsors continue to focus
on improving participant outcomes with 88% making changes to their
investment menus and 82% making changes to their plan designs in
the past two years. The study, which began in 2008 and surveyed
employers that offer retirement plans using a wide variety of
recordkeepers,i found an increase in plan sponsors’ desire for
their advisors to directly engage more with their employees.
“The past year has affirmed for plan sponsors that their
commitment to helping employees prepare for the unexpected in
retirement has never been more important and reinforced their
desire for strong employee outcomes,” said Liz Pathe, head of
defined contribution investment only (DCIO) sales, Fidelity
Institutional. “Plan sponsors are seeking expertise from their plan
advisors not only to help guide and inform their investment menu
and plan design, but also to help employees strengthen their
financial well-being.”
Heightened Demand for Advisor Guidance and Expertise
Although advisor satisfaction (73%) and value (69%) remained
high in 2020, advisor value perception was down 10% year-over-year
among smaller plans. The top three drivers of advisor value from
plan sponsors included: 1) helps improve employee outcomesii, 2)
helps improve employee satisfaction, and 3) provides financial
advice and guidance to participants among the top rankings.
The number of plan sponsors that reported they are looking to
change advisors more than doubled in the past year (34% in 2021
versus 16% in 2020). In fact, the top reason for wanting to change
plan advisors was a desire for better employee communication and
education, followed by lower stated fees, more retirement
expertise, and a better investment lineup.
The scope of guidance and expertise that plan sponsors expect
from their advisors continues to expand. Sponsors were also looking
for their advisor to have more expertise in helping minimize costs
(46%), selecting and monitoring investment options for the plan
(44%), and keeping them informed on regulatory changes and how to
implement them (42%).
“Plan advisors should take an active role in engaging both plan
sponsors and their employees to emphasize the value of their plan
and educate them to help improve outcomes,” said Pathe. “Otherwise,
they might risk losing clients to an advisor who provides better
education and guidance.”
Retirement Readiness Through the Pandemic &
Beyond
More than two-thirds (68%) of plan sponsors feel employees are
saving enough for retirement, up from 59% in 2020. However, 86% of
plan sponsors believe at least some of their employees are delaying
retirement due to a savings shortfall, and nearly two-thirds (60%)
believe the pandemic had an impact on their employees’ decision to
retire. Importantly, plan sponsors continued to support their
employees and contribute to their retirement savings amid the
challenges of the pandemic, with only 16% reporting that they
reduced the employer matching contribution over the past two years.
Plan sponsors’ goals for their plans are largely employee-focused,
and nearly three-quarters (72%) believe their plan is meeting its
goals this year, up from two-thirds in 2020.
Supporting Employees’ Full Financial Picture
Plan sponsors and plan advisors continue to look at programs
beyond the retirement plan recognizing the importance of these
benefits for employees. In fact, advisors who discuss topics such
as financial wellness and HSAs (health savings accounts) with plan
sponsors appear to earn higher satisfaction scores. Seventy-six
percent of plan sponsors who have discussed financial wellness
programs with their advisors reported being very satisfied with
their advisors (versus 65% who have not had those discussions).
More than three-quarters (78%) of plan sponsors stated they were
very satisfied with their advisors who raised the topic of HSAs
(versus 62% who have not had HSA discussions).
When asked how they were addressing rising health care costs,
half of plan sponsors said they were implementing wellness programs
to help employees improve or track their health, and 44% were
making changes to the health plan to lower company premiums.
Seventy-one percent of plan sponsors reported that their advisor
had spoken to them about a financial wellness program, and 62% have
implemented one in the past two years. Nearly three-quarters (73%)
of plan sponsors reported a strong impact from these programs for
employees, up from 61% last year.
Seven in 10 (71%) plan sponsors reported their advisor had
spoken to them about HSAs, and more than three-quarters (78%) find
advisor HSA guidance important. Plan sponsors offering HSAs have
seen increased enrollment, with more than half (55%) of employees
enrolled in an HSA, up from 40% in 2020.
Additional information on the survey, as well as resources and
tools—including fund analytics and details on investment
options—can be found at go.fidelity.com/attitudes.
Plan Sponsor Attitudes Study:
Methodology
The 2021 Plan Sponsor Attitudes Study was an online survey of
1,169 plan sponsors on behalf of Fidelity. Fidelity Investments was
not identified as the survey sponsor. The survey was conducted
during the month of March 2021. Respondents were identified as the
primary person responsible for managing their organization’s 401(k)
plan. All plan sponsors confirmed their plans had at least 25
participants and at least $3 million in plan assets. Though the
survey is broad in scope the experience of the plan sponsors
participating in the survey may not be representative of all plan
sponsors. Previous Fidelity surveys were conducted in 2008, 2010,
2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019, and 2020.
About Fidelity
Investments
Fidelity’s mission is to inspire better futures and deliver
better outcomes for the customers and businesses we serve. With
assets under administration of $11.0 trillion, including
discretionary assets of $4.1 trillion as of June 30, 2021, we focus
on meeting the unique needs of a diverse set of customers: helping
more than 35 million people invest their own life savings, 22,000
businesses manage employee benefit programs, as well as providing
more than 13,500 wealth management firms and institutions with
investment and technology solutions to drive growth. Privately held
for 75 years, Fidelity employs more than 47,000 associates who are
focused on the long-term success of our customers. For more
information about Fidelity Investments, visit
https://www.fidelity.com/about-fidelity/our-company.
Diversification does not ensure a profit or guarantee against a
loss.
Investing involves risk, including risk of loss.
Information provided in this document is for informational and
educational purposes only. To the extent any investment information
in this material is deemed to be a recommendation, it is not meant
to be impartial investment advice or advice in a fiduciary capacity
and is not intended to be used as a primary basis for you or your
client’s investment decisions. Fidelity and its representatives may
have a conflict of interest in the products or services mentioned
in this material because they have a financial interest in them,
and receive compensation, directly or indirectly, in connection
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______________________________
i
Data presented here is based on the full
2021 survey results. Other published or historical data may reflect
different values based on the criteria used, such as a plan asset
level or participant count.
ii
Improved employee outcomes include higher
participation and savings rates and better asset allocation, as
examples.
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version on businesswire.com: https://www.businesswire.com/news/home/20210722005036/en/
Corporate Communications (617) 563-5800
fidelitycorporateaffairs@fmr.com
Meghan Joumas (617) 392-2021 meghan.joumas@fmr.com
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