Enhancing Retirement Programs in 2024: Top Priorities for Plan Sponsors
Defined contribution (DC) plans are vital for US workers to save for retirement, with US DC plan programs totaling $9.6 trillion in assets as of the third quarter of 2023, representing 22% of all US retirement assets. This places a significant responsibility on plan sponsors to manage retirement benefits effectively.
7 Key Priorities for Retirement Programs in 2024
1. Complete a Comprehensive Target Date Fund (TDF) Review
Target date funds (TDFs) are a common feature in DC plans, with 85% of plan sponsors offering them. Proper selection and monitoring of TDFs are essential due to their automatic rebalancing as participants near retirement.
2. Trending and Trendy vs. Beneficial and Necessary
Plan sponsors need to discern between marketing trends and valuable additions to their retirement programs, particularly with emerging decumulation strategies and products.
3. Offer Comprehensive Employee Financial Education Resources
Customized financial education is crucial for engaging a diverse workforce effectively. Tailoring education methods to different generations can enhance employee participation and financial well-being.
4. Focus on Holistic Financial Wellness
Addressing financial stress, providing access to educational resources, and promoting financial wellness can improve productivity and retention among employees.
5. Evaluate Your Recordkeeper
Regular evaluation of recordkeepers based on services, products, and fees is vital to ensure quality service for plan participants.
6. Defend Cyber Security
With the increasing frequency of cyberattacks, plan sponsors must prioritize cybersecurity measures, review practices annually, and encourage participant engagement.
7. Governance and Compliance Refocus
Plan sponsors should refocus on neglected projects, such as recordkeeping evaluations, TDF reviews, and plan design analysis in 2024 to ensure all objectives are met.
Conclusion
By prioritizing these seven key areas in their retirement programs, plan sponsors can create positive retirement outcomes for participants. Subscribe to Enterprising Investor and the CFA Institute Research and Policy Center for more insightful content.
All posts reflect the opinions of the author(s) and should not be considered as investment advice or represent the views of CFA Institute. Content is for general information only.
© 2024 The PNC Financial Services Group, Inc. All rights reserved. Investments are subject to financial risks.
Professional Learning for CFA Institute Members
CFA Institute members can self-report professional learning credits earned from content like this blog. Use the online PL tracker to record your credits.