Recordkeeping has always been a challenging business, as exemplified by the shrinking num- ber of providers participating in our annual PLANSPONSOR Recordkeeping Survey. Brian O’Keefe, director of research and surveys at Strategic Insight, parent of PLANSPONSOR,
says, “Recordkeeping is often described as a commodity, and that might be true for the pure
administration of participant accounts, but the 55 providers responding to this year’s survey
showcase a wide range of investment, technology and servicing options.”
Still, change can be slow for this industry, which is responsible for more than $6 trillion
in retirement savings. For example, in the past four years, only a handful of recordkeepers have
introduced participant-focused mobile apps.
“I think the challenge for existing firms with legacy systems is how to keep up.
Sometimes it’s better to build from scratch than to rebuild what you already have—that’s
what creates the competitive pressure,” says Brian Graff, CEO at the American Retirement
Association, in Arlington, Virginia. “On the other hand, it’s a very tough industry. The scale
that’s needed to really make money, to be financially viable, is significant, and then there is
the distribution cost involved.”
Tim Rouse, executive director of the SPARK Institute, a member-driven nonprofit in
Simsbury, Connecticut, that helps shape retirement policy, points to a continuing trend
toward consolidation. A focus on keeping costs down drives folks to reconsider their busi-
ness model, he says.
As the industry searches for new ways to solve old problems, recordkeepers are at the forefront.
Rouse sees a continued push for automatic plan features—such as those already widely available,
including “auto-”enrollment and auto-escalation—and those requiring time and development,
such as auto-portability. Auto-portability, in which account balances would follow participants
from one job to the next, is purported to remedy several systemic issues that currently plague tens
2017 PLANSPONSOR RECORDKEEPING SURVEY