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Inside the Minds of Plan Sponsors

We've charted the evolution of defined contribution (DC) plans after conducting over a decade of plan sponsor and participant research. In this latest installment, we're seeing some helpful trends becoming the accepted standard. But there are also new frontiers that can further improve retirement readiness, as well as some problematic trends that need attention and change.

Desire for Income Solutions with Certainty and Control
Responsible Investing/ ESG Considerations in the Headlines
Fiduciary Awareness Is On the Rise
Keeping Participants On Track
Financial Wellness Programs—A Smart Investment
How Advisors and Consultants Are Standing Out
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Desire for Income Solutions with Certainty and Control

Most Plan Sponsors Find a Guaranteed-Income TDF Appealing

Guaranteed-Income TDF appealing”

81% of plans found adding a guaranteed income TDF “appealing” to “extremely appealing”

Guaranteed-Income TDF over the next two years

38% of plans say they are considering adding a guaranteed income TDF over the next two years as a part of the changes they are making to their organization’s plan design

Responsible Investing/ ESG Considerations in the Headlines

Sponsors Take ESG Seriously, but Many Are Not Sure Which Way Is Best

66% of Sponsors See ESG
Integration as a Call of Duty

Guaranteed-Income TDF appealing”

42% of Sponsors Grapple
with ESG Choices

Guaranteed-Income TDF over the next two years

Plan participants in favor too ― 90% of plan participants think it’s important that the investment options within their workplace retirement savings plan should adhere to their core ethical values

Fiduciary Awareness Is On the Rise

70% of plan sponsors consider themselves Plan Fiduciaries 30% of plan sponsors do not see themselves as Plan Fiduciaries

Plan Sponsors Who Consider Themselves, Personally, Plan Fiduciaries

Those Who Do Not See Themselves as Fiduciaries

Fiduciary Awareness Is On the Rise

Keeping Participants on Track

Reenrollments are on the rise. It is a powerful way to steer employees into effective investment options and provide fiduciary safe harbor to plan sponsors who reenroll into a target-date fund QDIA.

33 % of plan sponsors say they've conducted a reenrollment during the past three years

Keeping Participants on Track

Financial Wellness Programs― A Smart Investment

Engagement with the organization listed as top impact of offering Financial Wellness Programs at 61%

Plans That Offer a Formalized, Needs-Driven Financial Wellness Program, Separate from the DC Education Program

Types of Financial Wellness Programs Vary

Financial Wellness Programs― A Smart Investment

How Advisors and Consultants are Standing Out

60 % of plan sponsors rely on advisors/consultants to provide and objective check on the advice they get from other service providers

Plan Sponsors value most about the relationship with their current advisor/consultant

Financial Wellness Programs― A Smart Investment

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About AB's Defined Contribution Research:

AB' defined contribution team conducted a web-based survey of over 1,000 plan sponsors in its latest biennial research study. The survey's respondents had roughly equal representation from all plan sizes across the full universe of DC plans, but we purposefully skewed the concentration of plans in this survey to the large/institutional size plan category.

Here is a breakdown of respondents by plan size:

Financial Wellness Programs― A Smart Investment

The goal was to understand how plan sponsors feel about the current state of their companies' plans, their participants and the DC industry. This includes the key findings from our survey. It comprehensively updates the research we last conducted in 2014.

"Target date" in a fund's name refers to the approximate year when a plan participant expects to retire and begin withdrawing from his or her account. Target-date funds gradually adjust their asset allocation, lowering risk as a participant nears retirement. Investments in target-date funds are not guaranteed against loss of principal at any time and account values can be more or less than the original amount invested—including at the time of the fund's target date. Also, investing in target-date funds does not guarantee sufficient income in retirement.

Note to All Readers: The information contained herein reflects, as of the date hereof, the views of AllianceBernstein L.P. (or its applicable affiliate providing this publication) (“AB”) and sources believed by AB to be reliable. No representation or warranty is made concerning the accuracy of any data compiled herein. In addition, there can be no guarantee that any projection, forecast or opinion in these materials will be realized. Past performance is neither indicative of, nor a guarantee of, future results. The views expressed herein may change at any time subsequent to the date of issue hereof. These materials are provided for informational purposes only and under no circumstances may any information contained herein be construed as investment advice. AB does not provide tax, legal or accounting advice. The information contained herein does not take into account your particular investment objectives, financial situation or needs and you should, in considering this material, discuss your individual circumstances with professionals in those areas before making any decisions. Any information contained herein may not be construed as any sales or marketing materials in respect of, or an offer or solicitation for the purchase or sale of, any financial instrument, product or service sponsored or provided by AllianceBernstein L.P. or any affiliate or agent thereof. References to specific securities are presented solely in the context of industry analysis and are not to be considered recommendations by AB. This is not intended to be legal advice (and should not be relied upon as such) but just a discussion of issues.

The [A/B] logo is a registered service mark of AllianceBernstein and AllianceBernstein® is a registered service mark used by permission of the owner, AllianceBernstein L.P.

Investment Products Offered:

Are Not FDIC Insured | May Lose Value | Are Not Bank Guaranteed

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