Archived Insight | March 31, 2021
2020 was a challenging year for sponsors and participants of defined contribution (DC) plans, specifically highlighting the shortfalls in employer benefits.
In 2021, sponsors are looking for ways to engage and care for their employees. Here are the key focus areas we're seeing.
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In 2021 we expect sponsors to focus on support for compliance and processes. This could include updated plan documents for recent legislation and regulations, nondiscrimination testing, assessing operational plan risks and addressing missing participant data.
We also expect continued recordkeeper due diligence, including evaluating the impact of consolidation and fee transparency.
In 2021, aligning plan goals and design with business strategy and people objectives will be key.
Implementing plan design or benefit changes to address all aspects of employees' financial security will also be important.
This could include financial wellness programs.
This year plan sponsors are increasingly focusing on using data to drive behavior change, target communication, and match people with relevant resources. Additionally, holistic well-being, including financial well-being, will continue to be an important focus area.
In 2021 plan sponsors are redefining default options to more directly consider participant demographics, with consideration of custom glidepaths and dual-QDIAs.
They're also implementing best practice lineups, including an index core and review of fixed income options to ensure they are meeting participant needs.
In addition, plan sponsors are taking another look at providing solutions for guaranteed or predictable income streams.
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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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