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Over the past year, retirement plan sponsors' top concern shifted from reducing plan costs to helping employees prepare for retirement, according to a Fidelity study.
Fidelity Investments released the results of its ninth annual Plan Sponsor Attitudes Study, which revealed that the top concern of plan sponsors was whether the plan was effectively preparing employees for retirement financially (33%), whereas in 2017 the main focus was on reducing business costs related to the plan (32%).
"We view the increased focus on driving plan participants' engagement and savings rates as a positive shift," Jordan Burgess, who oversees defined contribution investment only sales at Fidelity Institutional Asset Management, said in a statement. "Plan sponsors can work with advisors to identify ways to boost retirement readiness for plan participants, in addition to leveraging them as a resource to manage the challenges and costs of the plan."
To help employees achieve their savings goals, many sponsors are making changes to plan design (82%) and investment menus (83%).
As plan sponsors continue making changes to investment menus and plan design, the reasoning behind those changes mirrors their overall focus on retirement preparedness for participants, according to Fidelity.
The study finds that the reason for most plan design changes was to increase employee participation or savings rates. About one in three plan sponsors reported that they added or changed a matching contribution, which is up from the 25% who did this in 2017. According to the study, this was the top change made to plan design this year.
