Survey of the Retirement Landscape: Challenges and Opportunities for Defined Contribution Specialists

Survey of the Retirement Landscape: Challenges and Opportunities for Defined Contribution Specialists

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About the Survey

From mid-February to early March 2023, Voya Investment Management (Voya IM) repeated its online survey of retirement plan sponsors and DC specialists focused on the retirement plan market to:

  • Identify the evolving priorities and service needs of plan sponsors
  • Help DC specialists align their service offerings to the priorities of plan sponsor clients and prospects
  • Identify unfolding opportunities and offer suggestions for DC specialists to help address them

Previous waves of the survey were conducted in March 2021, December 2018 and April 2016. 

The survey was expanded in 2023 to include contributing participants for the first time, in an effort to better understand their perspectives on issues such as retirement readiness investing, and financial confidence.

Certain exhibits distinguish plan sponsor segments by size of plan. The study divided sponsors into three segments: plans with $1 million to less than $5 million, plans with $5 million to less than $25 million, and plans with more than $25 million. In other exhibits, the study distinguishes between heavy-focus DC specialists, whose practices emphasize plan sponsor clients, and emerging DC specialists, for whom plan sponsors represent a smaller proportion of business. Details on the definitions and methodologies of the study can be found in the Appendix. Some exhibits may not sum due to rounding.

Key Findings

  • When it comes to retirement readiness, participants said they are much less prepared than both plan sponsors and DC specialists believe.
  • Ensuring the plan’s regulatory compliance and that participants are appropriately invested are the two most important areas of short-term focus for both sponsors and specialists.
  • Cybersecurity and reasonable plan fees were the top concerns of both sponsors and specialists.
  • Sponsors said they value guidance from specialists on retirement income investment options and investment selection/monitoring more than any other services.
  • As in previous editions of the survey, specialists again said they provide an array of services that plan sponsors do not acknowledge, pointing to a persistent communications problem.
  • Specialists and sponsors agreed that annualized performance and historical rolling returns are the most important investment selection factors to consider, while deprioritizing other factors such as R-squared and Sortino ratio.
  • Sponsors recognize that an aging participant base has brought focus on the growing need for retirement income products but cite cost and complexity as key challenges in offering these products.
  • Since 2021, sponsors have increased their adoption of financial wellness programs and tools; top barriers to adding these programs include cost and difficulty in measuring outcomes.
  • Sponsors and specialists underestimate the number of employees who act as caregivers, suggesting an opportunity to educate and support sponsors in these efforts.

This commentary has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain of the statements contained herein are statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities. The opinions, views and information expressed in this commentary regarding holdings are subject to change without notice. The information provided regarding holdings is not a recommendation to buy or sell any security. Portfolio holdings are fluid and are subject to daily change based on market conditions and other factors.

Past performance does not guarantee future results.