BCG Blog - Sponsors

Lately we’ve noted an uptick in the word recession. It isn’t the frequency of its use that concerns us, it’s the placement. Lately, the use of the word recession has been popping up more in the general media. While we know that talk of recession is a strong indicator of investor confidence concerns, it’s a complicated topic. Getting it right is important.

New research indicates a gap between how well retirees perceive that they are doing against how well they actually are financially. In the past survey responses of retirees showed high satisfaction even though objective measures told a different story. Plan sponsors may want to increase participant education programming to help with the gap areas identified in new research.

The Department of Labor (DOL’s) beleaguered fiduciary duty rule lingers on in federal court litigation, but there are signs that the dispute (as well as the Rule) may not be around for long.

There are several levels to the news on ESG. For plan sponsors not all of the forthcoming information is necessarily news to use. We suggest focusing on the news about lawsuits on fiduciary duties and ESG rules for plan sponsors.

Instead of taking changes at the DOL as single item issues, it might be more useful to see how all the changes interact. Often, legislators and regulators want changes to interact like a puzzle; each piece interlocking to form a larger picture. But sometimes when many policies are changed at the same time, conflicts emerge that can put those supposed to be following them into the proverbial spot between a rock and a hard place.

Many plan sponsors report lags in enrollment and retirement activity among plan participants. While some statistics show that new tricks and tips have impacted participation in retirement plans, enrollment may still lag. It is possible that the way employees think about retirement in general could be behind the lag in active retirement investing.

With the success of auto-enrollment in retirement plans for new hires, some plan sponsors are looking to a new trend among benefits. Many have begun creating plans for re-enrolling employees who have dropped out of retirement plans during their tenures.

When it comes to financial wellness, plan participants and sponsors might not be seeing eye to eye. That divide may not be insurmountable; a little planning may smooth any tensions.

Employee education is often a topic plan sponsors or the employer delegates to vendors, such as a plan administrator. However, recent surveys indicate plan sponsors are opting for plan design changes. It is possible that linking employee education programs to these changes could facilitate those changes.