Plan Sponsor Attitudes

Survey Results: 9th Edition

Valuable Insights for Plan Sponsors

Fidelity has been surveying plan sponsors since 2008 and each year's results provide insights into plan sponsors' needs and behaviors that advisors may find valuable in order to both win and retain plan business.

Understanding plan sponsors' focus can help you align your approach to their specific needs and Fidelity's insights can help you do just that.

The Number of Sponsors Working with an Advisor Is at an All-Time High.

Of plansponsors workwith an advisorHave beenworking with theircurrent advisorfor 4 yearsor lessOf plan sponsorssaid they arelooking to switchadvisors (downfrom 38% in 2017)92%44%22%

Sponsors Are Seeking Efficient and Reliable Support

In 2017, 37% of plan sponsors stated the No.1 reason to hire an advisor was for fiduciary help. That percentage dropped to 14% in 2018, with plan sponsors' focus shifting towards plan participant concerns.

Top 3 PlanSponsor Concerns1Is the plan effectivelypreparing employees forretirement financially?2Is the plan helping toretain top workers?3Are plan-related businesscosts being reduced?
Top 3 ReasonsSponsors Say TheyHired an Advisor1I want to better understandhow well my plan is workingfor my employees, and howI can improve it.2Our company has grownand the retirement planhas become morecomplicated3We have less time to devoteto the 401(k) plan now, so weneed someone to help us

Plan Sponsor Activity Remains High

Similar to years past, more than 80% of plan sponsors reported making changes to their plans within the last year.

So What Is It That Plan Sponsors Are Changing?

of plans increased thenumber of investmentoptions available37%83%of sponsors reportedmaking some sort ofinvestment menu changeMost changes weredone toincreaseemployeeparticipation (54%)82%of sponsors reportedmaking changes tothe plan designIncreasing savingsrateswas reported asthe second mostfrequent response(51%)

Prove the Value of Auto-Enrollment

Plan sponsors tend to believe auto-enrollment(AE) will discourage employees from participating in the plan. Fidelity studies prove this perception is far from the truth. The next generation of the workforce reported significantly higher participation rates when in plans with auto-enrollment. The actual participation rates for 20–29-year-olds in an auto-enrollment plan is 84% versus 31% in non-auto-enrollment plans. Auto-enrollment is a powerful way to get employees into plans and saving more.

Consider Four Steps to Implement Auto-Enrollment.

1234Initiate theConversationShare theDataDispel theMythsTurn Inertiainto an Asset11%of sponsorsreported their advisorhas not recommendedauto-enrollment51%of plans surveyed32%of Fidelity qualifiedplans offer AE (10%among smallest, 76% oflargest plans)68%of employeesreport being VerySatisfied with beingautomatically enrolled inthe planFidelity plans with 3%AE default deferralhave83% participation,and86% participation inplans with 6% deferralDesign a plan usingauto-solutions to putplans on a path tosupport participants’retirement readiness

Here's What You Can Do to Increase Plan Sponsor Satisfaction

Understanding how sponsors perceive value and taking specific steps to tailor your approach can help position you for success.

Explain yourcosts+34%Ask how youare doing+22%Demonstrateyour value+20%Provide a writtenstatement ofyour services+25%4 areas you can add value:• Plan Investment Performance• Fiduciary Risk Considerations• Plan Improvements (e.g., Participation Rates, Contribution Rates)• Activities They Have Performed

Plan Sponsor Attitudes 2018 Resources

Fidelity's proprietary plan sponsor survey

  • Based on responses of 1,124 plan sponsors who use a wide variety of recordkeepers, not just Fidelity.
  • Covered plan sizes with at least 25 participants and $10 million in plan assets, and start-ups to plans with over $250 million in plan assets.
  • Focused on plan sponsors using a financial advisor or plan consultant.

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