PLANSPONSOR - November/December 2024 - 4

PARTICIPANT ANALYSIS
'Wellness' Could Be a Key to Saving
H
ow can plan sponsors support
plan participants in improving
their retirement outcomes?
Considering that, according to the
2024 PLANSPONSOR Plan Benchmarking
Report, only 34.1% of plan sponsors think
most of their employees will achieve their
retirement goals by age 65, and 60.7%
overall think " our company has a responsibility
to improve the 'financial wellness'
of our employees, " the above question
is important. While not all respondents
expressed feeling this duty, those who did
were apt to have a larger plan, with over
$1 billion in assets (73%), vs. a micro plan,
with under $1 million in assets (37.2%).
So, how do sponsors that want to
improve their workers' outcomes and wellness
go about it? Overall, respondents said
they believe the plan feature most effective
for this purpose is education (31.2%),
followed closely by holistic wellness tools
(27%). One in five (19.1%) cited one-on-one
financial planning with an adviser.
Yet, when we deepen the analysis,
two-thirds of plans topping $100 million in
assets ranked wellness tools ahead of education,
compared with about 15% of plans
that have $1 million to $5 million in assets.
This is interesting, as it appears that over
half of all plans do offer advice in some
format. Perhaps participant take-up is low,
so the offering is seen as less important.
Reflecting the emphasis on wellness,
the three most common topics for participant
education are saving strategies/prioritization;
financial market and investing
basics; and budgeting tools. Over
twothirds
of respondents also checked off
retirement health care costs/saving options
and rolling past balances into the plan.
When asked which third-party services
or types of support are, or would be,
most valuable to them in their sponsor
role, they scored the three choices-provide
participants with one-on-one planning
advice; develop or evaluate financial
wellness programs; and develop a participant
communication strategy-each a
median 4 on a scale of 1 to 5. -PS
4 PLANSPONSOR.COM November - December 2024
Defined Contribution Plan Features Believed to
Most Greatly Improve Participant Outcomes
Participant education
Holistic financial wellness tools
One-on-one financial planning help with an adviser
In-plan guaranteed income solutions
Personalized asset allocation through managed accounts
Default investment or QDIA fund performance
31.2%
27.0%
19.1%
9.3%
7.9%
5.6%
Financial/Investment Advice Offered to Participants in the DC Plan
One-on-ones with a financial adviser outside of the plan
Proprietary tools and services through our recordkeeper
Use of a 3rd party independent of our recordkeeper
Advice is not currently offered to participants
Other advice
54.5%
51.5%
41.9%
26.5%
3.4%
Topics About Which the Company Provides
Formal Financial Education/Guidance to Participants
Saving strategies/prioritization
Financial market and investing basics
Budgeting tools
Rolling over past balances into the plan (for new hires)
Retirement health care costs/savings options
Rollover options for terminated/separating employees
Tax/Estate planning
Credit/Debt management (excluding student loans/debt)
College saving
Social Security withdrawal options/strategies
Student loans/debt
Home buying
None, plan offers no targeted education on these topics
84.7%
82.1%
81.1%
72.5%
68.3%
65.9%
64.0%
62.0%
59.0%
58.3%
55.1%
43.7%
25.4%
Source: 2024 PLANSPONSOR Plan Benchmarking Report, from the 2023 PLANSPONSOR DC Survey
http://www.PLANSPONSOR.COM
PLANSPONSOR - November/December 2024

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