Three themes emerged from Aon Hewitt’s ninth installment of its annual benchmarking report examining the retirement focus areas of plan sponsors in the upcoming year, including that there is wide accord among plan sponsors regarding expansion of their financial wellness focus; employers will leverage their scale and size to improve defined contribution plans for participants; and defined benefit plan sponsors continue to carefully monitor and eliminate risk from their plans.
Aon Hewitt in the fall of 2014 surveyed roughly 250 large plan sponsors representing nearly 6 million employees to gauge current and future retirement perspectives.
Among the key findings were that in 2015, 93% of companies are very or moderately likely to create or broaden their efforts on financial wellness topics in a manner that extends beyond retirement decisions, and half of all companies believe the significance of financial wellness concepts has increased over the last two years.
The survey also found that products, services, and tools that provide savings and investing assistance to participants continue to gain favor, and features such as online guidance, managed accounts, and phone access to financial planners or investment advisors are expected to be the norm, not the exception by the end of the year.
In addition, 30 percent of plan sponsors have recently moved from mutual funds to institutional or separately managed accounts, and almost two-thirds of all plan sponsors are very likely to review plan expenses and revenue sharing in 2015, with one-third planning to change funds in an effort to reduce costs, according to the findings.
Aon Hewitt also reports that, in the wake of some high-profile annuity purchase announcements, nearly 20% of respondents indicated their willingness to purchase annuities in 2015. While few sponsors reported that they will impact their active employees by closing the plan or freezing benefits, many employers reported that they are likely to initiate a lump-sum window for terminated vested employees in the plan, the survey found.