Perceptions On Retirement

Surveying The Retirement Landscape

Voya Investment Management finds large plan sponsors most concerned about employee participation

Voya Investment Management (Voya IM), the asset management business of Voya Financial, Inc. (NYSE: VOYA), today announced the results of its inaugural survey of retirement plan sponsors. The Survey of the Retirement Landscape: Sponsor Perceptions sought feedback on a range of concerns from retirement plan sponsors such as plan support, investments, participant support, regulatory and compliance issues and plan costs and fees; in addition, respondents were asked about several emerging issues such as financial wellness programs, help for special needs caregivers and cybersecurity.

The findings offer perspective on the challenges plan sponsors face and the services needed. Many of the study’s findings are segmented by plan size: “smaller” plans with at least $1 million but less than $5 million, “mid-sized” plans with at least $5 million but less than $25 million and “larger” plans with $25 million or more.

Key Findings

  • Top priorities for plan sponsors include ensuring plans comply with new regulations, reducing plan fees, monitoring performance of investment options and educating/communicating with plan participants. Larger plan sponsors are more likely to believe a focus on participation, investment and financial wellness are important; smaller plans place higher emphasis on reducing plan fees and expenses.
  • Plan sponsors generally consider participants at least somewhat ready to retire. Still, more than seven in ten sponsors say it is important to help participants prepare for retirement, and more than half consider it important to help participants with “holistic” financial wellness.
  • The top goals for financial wellness programs cited by sponsors include helping participants improve their financial future (46%), helping employees reach their financial goals (44%) and helping them understand the impact of decisions of high importance (44%).
  • The most frequently mentioned unprompted significant challenges for plan sponsors are increasing participation/contribution levels (28%) and educating employees about retirement savings and plan details (25%) such as options, fees, match, investments and performance.
  • Plans sponsors almost unanimously agree (94%), their preference is to work with an advisor who specializes in retirement plans.

Retirement Readiness

“Regardless of plan size, sponsors see getting participants to think long-term and contribute more as the key challenges,” said Michael De Feo, head of Retirement and Investment Only, Voya IM.

Sponsors of smaller plans believe participants are inhibited by not knowing how much they will need at retirement (60%). Mid-sized plan sponsors see participants as inhibited by not contributing enough (59%) not investing appropriately (45%) or by borrowing from their retirement savings (44%).

Participant Support

Despite concerns about financial wellness programs giving too much information, nine of ten plan sponsors say providing more robust and detailed information on plan options can help participants make better investment decisions.

Similarly, 91% of sponsors agree that improving monitoring, tracking and benchmarking of individual participant goals can lead to better investment outcomes. Slightly fewer plan sponsors, about eight out of ten, think that incorporating digital planning and advice tools can help participants make better investment decisions.

There is a critical need for plan sponsors to take into consideration employees with special needs and their employees who serve as caregivers. Employees are more productive, engaged and loyal to their employers when there are avenues to help meet these needs...

Sponsors tend to underestimate the proportion of employees who are caregivers for people with special needs. Smaller plan sponsors are more likely than mid-sized or larger plan sponsors to estimate fewer than five percent of participants are caregivers or to consider it important to focus on the unique financial needs of these employees.

Sponsors also tend to underestimate the importance of help for caregivers. Ten percent of all plan sponsors think it is very important to focus on the unique financial needs of caregivers to special needs individuals. Of those who care for an adult with a disability, 90% say they receive little or no financial support three out of ten are not saving for retirement.

“There is a critical need for plan sponsors to take into consideration employees with special needs and their employees who serve as caregivers,” says De Feo. “Employees are more productive, engaged and loyal to their employers when there are avenues to help meet these needs.”

Plan Sponsor Support

More than two-thirds of plan sponsors say they have a growing need for support from their retirement plan advisor. In accordance with this finding, approximately six in ten sponsors are demanding more services and plan expertise for their advisors.

Across plan segments, sponsors indicate similar priorities when choosing a plan advisor. Investment selection and monitoring are rated most important, followed by participant education and communication. Education and communication seem to be more important to smaller plans than to larger ones. Financial planning/wellness support is considered of relatively high importance.

“Managing a retirement plan demands attention to numerous, complex issues ranging from compliance with ERISA regulations to monitoring investment options and engaging participants to help them prepare for retirement. With so many challenges and so many areas of concern, sponsors are looking to their advisors for expert assistance and guidance,” says De Feo.

For additional information, read Survey of the Retirement Landscape: Sponsor Perceptions by visiting voyainvestments.com/sponsorperceptions.

Survey Methodology
In December 2018, Voya IM conducted an online survey of retirement plan sponsors and financial advisors focused on the retirement plan market to better understand product, service and support preferences, as well as identify unmet needs and emerging opportunities.

 

 

 

Brookmark Research (BM) and Practical Perspectives (PP) assisted Voya IM with the development, execution and analysis of the plan sponsor and advisor surveys. An Internet methodology was used to conduct the study. Interviews took approximately 12.5 minutes to complete.
About Voya Investment Management
A leading, active asset management firm, Voya Investment Management manages, as of June 30, 2019, more than $214 billion for affiliated and external institutions as well as individual investors. With over 40 years of history in asset management, Voya Investment Management has the experience and resources to provide clients with investment solutions with an emphasis on equities, fixed income, and multi-asset strategies and solutions. Voya Investment Management was named in 2015, 2016, 2017 and 2018 as a “Best Places to Work” by Pensions and Investments magazine. For more information, visit voyainvestments.com. Follow Voya Investment Management on Twitter @VoyaInvestments.