Investment consulting firm NEPC recently found, in its second “Defined Contribution COVID Impact Poll,” that employers are returning their focus to benefits that were a priority before the COVID-19 pandemic came on the scene. Namely, they are once again focused on financial wellness programs and retirement income options.
“The pandemic and CARES [Coronavirus Aid, Relief and Economic Security] Act changed the landscape, and plan sponsors worked overtime for their participants last year,” says Ross Bremen, a partner at NEPC and a member of the firm’s defined contribution (DC) practice group. “There’s a more optimistic view of 2021, with the majority of respondents (40%) planning to get back to ‘business as usual.’ Topics that were hot prior to COVID—financial wellness tools (40%) and lifetime income (33%)—are back on the docket.”
The NEPC findings echo a recent Employee Benefit Research Institute (EBRI) survey that found about half of plan sponsors offer a financial wellness program tied to their retirement plan.
And a Nationwide survey found that nearly two-thirds of plan sponsors are considering offering a retirement income option as a result of the Setting Every Community Up for Retirement Enhancement (SECURE) Act.
Ninety-six percent of respondents in the NEPC poll said they are satisfied with their investment menus. Thirty-two percent rated their target-date funds (TDFs) as “terrific.” Not a single respondent said their TDF delivered “disappointing” performance.
The majority of the respondents are from public (19%), health care (20%) and corporate (52%) organizations.
While 50% of all respondents enacted furloughs last year, this jumps to 66% of health care organizations.
Forty-four percent of health care plans suspended their matches last year. All respondents that suspended the match in 2020 say they will reinstate it this year.