2021 Plan Sponsor Survey {DOWNLOAD}
New year, new numbers! Xponential Growth Solutions’ mission to educate and empower plan sponsors went virtual in 2020. We’re kicking off 2021 with results from our annual survey of retirement and healthcare plan sponsors nationwide.
Check out this highlight video, or keep reading for essential takeaways from the report.
This year’s report compiled responses from over 700 plan sponsors in 2020. It includes:
• Summary of Respondents
• Fiduciary Training Data
• Topics of Interest
• Searches and Hires
• Time Since Last RFP
• Plan Sponsors Questions from 2020
Below is a summary and some of our thoughts on the results. Download the full report to see more!
Key Insights
Fiduciary responsibility remains top of mind for plan sponsors, followed by financial wellness and economic & legislative updates. That being said, lack of education continues to fall short among plan fiduciaries, with 65% indicating they had not received any previous fiduciary training.
Need For Fiduciary Training
Plan sponsors with larger plans or that have a defined benefit plan tend to have fiduciary training. Too many plan sponsors across the board continue to need better training regarding their responsibilities.
COVID-19 Impact
The impact of Covid-19 on employees and organizations can be seen throughout the industry. Many plan sponsors put off searches and hiring due to the pandemic; 12% of organizations indicated they would be actively searching for retirement advisor services within the next 12 months, compared to the 30% reported last year.
Searches & Hiring
For retirement advisors, priorities shifted to boosting their client base. According to another recent 2020 PLANADVISER Practice Benchmarking Survey, 58% of advisors rated adding new clients as a top concern for their practice today, compared to 43% in 2019. All this together would suggest pent-up demand for 2021 retirement advisors hires.
The 2020 Presidential election, SECURE Act and CARES Act also shook things up, increasing legislative uncertainty and economic issues heading into the new year.
Top 5 Plan Sponsor Questions
These key topics dominated plan sponsors’ most-asked questions in 2020, the top 5 being:
Where do you draw the line of “this is enough for us to have met our fiduciary duty” when balancing relationships vs. benchmark costs?
Are there exemptions to the RFP process for selecting a 401(k) plan provider?
Assuming a company sponsors a 401(k) plan with less than 1,000 eligible participants and has done their due diligence in hiring their external service providers (trustee/custodian, recordkeeper, payroll, etc), how much time would you expect that the CFO or controller is (or should be) spending on their 401(k) plan...risk assessment, ongoing monitoring of service provider & related controls, preparing for their f/s audit, etc.?
What are the effects of “Covid-related” distributions and our fiduciary responsibilities?
How can an employer teach an employee how to build their 401(k) without the employee continuously wanting to take out loans?
What to Expect in 2021
If 2020 taught us anything, it’s to expect the unexpected – but overall, here’s what we see on the horizon in 2021:
1. Plan sponsors will continue to need fiduciary training
2. More plan sponsors will be hiring service providers in 2021
3. Political landscape changes will shift priorities around regarding new rules and regulation
4. Changes in the workplace due to things like working from home, vaccines, and stimulus will continue to force the industry and plan sponsors to have to adapt and get creative