Employee Retirement Confidence Trails Plan Sponsors’ Optimism
While more than half of surveyed employers were confident about employees’ abilities to retire on time, participants were far more negative.
Plan sponsors have gained confidence in their employees’ abilities to retire at their target age, but not enough to ward off all skepticism, according to MFS Investment Management’s 2026 Defined Contribution Plan Sponsor Survey, released Tuesday.
One-third (33%) of responding plan sponsors reported being very or extremely confident in their participants’ ability to retire at their target age, up from only 18% one year prior. Sponsors tended to be most confident in older generations’ abilities to retire, with Baby Boomers at the top (66%), followed by Generation X (51%), Millennials (35%) and Generation Z (30%).
Participants’ attitudes differed considerably from those of their employers, however: Gen Z respondents (30%) reported greater confidence than Millennials (27%) and Gen X (24%), and they were only slightly less confidence than Boomers (37%).
Sponsors attributed the high confidence to factors such as strong contribution rates (94%), participant engagement (67%) and the effective use of tools and services (54%). However, 77% cited current economic conditions as a major concern impacting retirement readiness.
Personalized Advice
According to the survey, 70% of sponsors said personalized advice was important to driving better participant outcomes. Nearly three-quarters (74%) reported currently providing advice services to participants, including 62% offering direct access to personalized advice and 37% offering similar services through an in-plan managed account.
On the demand front, 71% of participants expressed interest in using an adviser if their plan offered access to one.
Caution Regarding Alternative Assets
The survey, conducted months after the August 2025 executive order encouraging DC plans’ access to alternative assets, found that 88% of plan sponsors reported that they were not evaluating the use of digital assets and 61% said the same about private assets.
Among those exploring the asset categories, most said they were still in the early education phase, with only 4% of sponsors indicating they might implement private assets in their plans within the next one to two years.
Asked whether participants had expressed interest in the asset classes, 64% of sponsors reported no inquiries, while 15% said participants had asked only in the context of news headlines. Just 13% of participants had specifically asked about the inclusion of the assets in their DC plans, plan sponsors reported.
QDIAs, Active Management
Target-date funds were the most dominant qualified default investment alternatives among respondents, with 86% of sponsors reporting using them. Plan sponsors said one of the reasons they offered TDFs as QDIAs involved risk, with 38% citing diversification risk, followed by downside market risk (22%), behavioral risk (19%) and longevity (12%).
In addition, the survey showed many plan sponsors were prioritizing active strategies to navigate market volatility and capitalize on investment opportunities, with 65% saying their plans currently offer actively managed strategies. Meanwhile, 86% considered it good practice to offer a mix of active and passive strategies.
From October through November 2025, MFS surveyed 153 plan sponsors representing more than $400 billion in plan assets and nearly 100 million participants.