Plans’ ‘Advice’ Offerings

There has been an evolution across many retirement plan education programs—bucking the traditional focus on stocks and bonds, large cap vs. small cap—to generations that include a broader financial wellness context.

The 2016 PLANSPONSOR Defined Contribution (DC) Survey shows that just over half, 50.4%, of plan sponsors across all plan sizes offer education on at least one topic. The most common is investing basics and strategies (42.0%), followed by saving and budgeting (36.1%), credit and debt management (19.7%), Social Security withdrawal strategies (19.2%), retirement health care costs (19.1%), college savings (14.6%), tax and estate planning (13.4%), home buying (10.3%) and long-term care (10.2%). Sponsors are even offering plan participants bona fide advice.

When asked about offering advice to participants, 76.3% of plan sponsors said they do offer advice, and that remains fairly consistent among plans of all sizes, with 70.9% of micro plans and 73.4% of mega plans doing so. It is difficult not to wonder whether these plan sponsors really mean “advice” under the same definition used by the Department of Labor (DOL), as on-site meetings with an adviser or financial planner outside the plan are more common among micro, small and midsize plans, whereas large and mega plans are more inclined to rely on a third party or their recordkeeper’s website or call center—many of which would not be considered advice providers.

An independent adviser or financial planner who offers on-site advice is made available at 41.9% of micro plans but only 25.4% of large and 19.4% of mega plans.