Infographic: U.S. employers look to enhance defined contribution plans

Plans continue to evolve: 3 in 4 definned contribution (DC) plan sponsors expect to make at least one change to their plan over the next 2 years. After already having made a chance in the past 2 years.

4 in 5 expect to enhance their employees’ experience and financial wellbeing. Employee experience: past 2 years – 64%, next 2 years – 82%, financial wellbeing: past 2 years – 59%, next 2 years – 78%.

Nearly two-thirds of sponsors intend to change DC plan design over the next 2 years.

To boost savings: 28% expect to make changes to their plans’ automatic deferral features. To build financial resilience: 40% planning/considing adopting an innovating design feature, such as allowing participants to redirect plan contributions to student loans, emergency savings or health savings account (HSAs).

Sponsors see opportunities to support employees’ retirement security and financial wellbeing.

Over 9 in 10 either have taken or are planning/considering taking the following actions: offering access to personalized support, using targeted communication tailored to specific segments, providing digital tools to help with budgeting and spending.

8 in 10 either have integrated or are planning/considering integrating defined contribution plan strategy with financial wellbeing and resilience.

55% of sponsors expect to face attraction and retention issues over the next 2 years.

Of these employers, 1 in 3 regard their DC plan as an important attraction and retention tool and expect to differentiate their plan to compete for talent

Actions you can take now: Leverage available analytics to evaluate how different employee cohorts are engaging with and benefiting from your DC plan.

Integrate DC plan strategy with financial wellbeing and resilience, enhancing connection to financial wellbeing programs. Improve your plan design by adding/enhancing automatic deferral features and allowing employees to direct contributions to student loans, emergency savings or HSAs. Provide digital tools to help employees with budgeting and spending. Target communications to specific workforce segments.

About the survey

The 2022: Next Evolution of DC Plans Survey was conducted during January and February 2022. A total of 363 U.S. employers that sponsor a DC plan participated in the survey. Respondents employ 8.4 million employees.