Faced with rising benefit costs and increased regulatory complexity, only 2% anticipate spending less time managing their plans. Among those respondents that expect to spend more time on plan governance, a vast majority (86%) cited regulatory complexity as a major reason, while two-thirds (67%) plan do to so as part of a greater emphasis on corporate governance.
The survey also asked respondents to identify the greatest retirement plan governance challenges they expect to face in the next two years. Just over three-fourths (77%) placed retirement benefit costs among their top challenges, while slightly fewer (73%) cited regulatory complexity.
More than 80% of defined benefit and defined contribution plan sponsors identified regulatory compliance and investment volatility as the top risks over the next two years; however, only one in four (26%) schedule regular compliance reviews.
“Unfortunately, it appears that most plan sponsors generally wait until compliance issues emerge rather than take action to avert them,” said Robyn Credico, a senior consultant with Towers Watson. “Employers can take proactive measures to deal with risk issues. By conducting more regular compliance reviews, for instance, employers can get ahead of concerns over regulatory complexity and vendor quality.”The survey was based on responses from 245 mid-size and large employers that sponsor defined benefit and/or defined contribution retirement plans.