Many Sponsors Unaware of Fiduciary Responsibilities

These sponsors tend to be less involved with their retirement plans.
In the past three years, there has been a decline in retirement plan sponsors’ awareness of their fiduciary responsibilities, according to research from AllianceBernstein. More than one-third (37%) of sponsors aren’t aware that they are fiduciaries, up from 30% in 2011.

“There’s a clear correlation between a lack of fiduciary awareness and plan sponsors that are less concerned with increasing employee engagement and protection in retirement plans,” says Dick Davies, senior managing director of AB’s defined contribution business and co-head of North American Institutions.

The survey also found that the use of target-date funds (TDFs) is rising, and those sponsors that use target-date funds take fiduciary concerns more seriously; 87% of sponsors with TDFs said fiduciary concerns were important or very important.

“What’s comforting is that the adoption of target-date funds is rising, and plan sponsors and participants alike want more innovative products that are changing the retirement outcomes for plan participants,” Davies says. “These include guaranteed income TDFs, multi-manager funds and other customization options available in the DC marketplace.”