While defined contribution (DC) plan fees are plan sponsors’ top concern when selecting a recordkeeper, they are also greatly concerned about the websites they offer for both sponsors and participants, according to a survey by Corporate Insight.
“At the end of the day, more traditional topics such as fees and investment lineup accommodation will take precedence in these discussions, but in an ever-evolving industry that is undergoing consolidation and increasing parity in terms of fees and investment lineups, digital capabilities will increasingly make or break recordkeepers’ business,” Corporate Insight says.
A survey of 338 plan sponsors that the firm conducted in June found that 91% of employers say that their website experience is either equally or more important than participants’ experience. Sixty-eight percent of sponsors say they log onto the plan sponsor website at least once a week, and 18% do so daily, up from 10% in 2017. Seventy-six percent say they view the plan sponsor website either as very or extremely important in relation to their responsibilities to the plan.
Eighty-eight percent of sponsors say they are either satisfied or very satisfied with the sponsor website from their recordkeeper. However, only 31% said they are very satisfied, indicating, according to Corporate Insight, that there is room for improvement.
As to what, specifically, sponsors are looking for, Andrew Way, director of research, annuity, life and retirement at Corporate Insight, tells PLANADVISER, “first and foremost is website security, followed by plan level information and plan administrative capabilities, such as enrolling, updating participant data, completing requests such as distributions, and reporting functionality.”
A few recordkeepers have created intuitive plan health dashboards, but five years ago, sponsors would have to go through laborious reporting procedures to extract each data point, Way says. Recordkeepers have put far more work into updating participant websites than they have sponsor websites, he says. “Many still have antiquated designs and user interfaces,” Way says. “Sponsors hold these websites up to the high quality service they get from non-financial websites, such as Google. If they don’t offer an intuitive plan health dashboard or haven’t updated it in a few years, they need to do so.”