Workplace retirement plan sponsors are increasingly expanding financial wellness initiatives and developing innovative retirement income decumulation strategies, demonstrating increased engagement in supporting employees, according to the U.S. defined contribution (DC) plan sponsor survey findings released today by J.P. Morgan Asset Management.
This year’s sixth annual survey, Scaling what works, shaping what’s next, includes insights from 750 U.S. plan sponsors, providing a comprehensive benchmarking snapshot of their perspectives and actions in refining retirement offerings.
5 key findings
• Over 80% of plan sponsors acknowledge their role in supporting employee financial wellness, with many expanding benefits accordingly.
• Only 22% of plan sponsors with a significant Gen X employee base express strong confidence that their employees are saving adequately for retirement.
• Emergency savings, student loan debt assistance and debt management benefits, remain under-implemented, particularly among smaller employers
• Over half of plan sponsors are unaware of their fiduciary roles, and one-third lack understanding of their target date funds.
• Nearly 80% believe their plans should generate retirement income, with 61% considering adding in-plan income options this year.
Need for proactive strategies
“Our 2025 Plan Sponsor Survey highlights a shift in retirement planning with plan sponsors recognizing the need for proactive strategies to enhance participant outcomes,” said Alyson Frost, Head of Retirement Insights at J.P. Morgan Asset Management. “The findings emphasize the important role of financial wellness programs in boosting employee productivity and engagement. Plan sponsors are committed to providing the necessary tools and education for long-term financial security, and we anticipate further adoption of innovative strategies to meet the diverse needs of today’s workforce.”
A key finding of the research was that over 80% of plan sponsors acknowledge their role in supporting employee financial wellness, with many expanding benefits accordingly. However, critical programs, such as emergency savings, student loan debt assistance and debt management benefits, remain under-implemented, particularly among smaller employers.
The survey highlights how generational differences within workforces influence plan sponsors in addressing the unique needs of Gen X, Millennials, and Gen Z, each offering distinct perspectives on retirement planning. Notably, only 22% of plan sponsors with a significant Gen X employee base express strong confidence that their employees are saving adequately for retirement. This underscores the need for targeted strategies to support Gen X, especially as that generation nears retirement.
Nearly half (49%) of respondents say they now favor a proactive approach to plan design reporting higher satisfaction across key measures, including participation and contribution rates, investment performance and participation education quality. Despite this progress, there is still opportunity to continue to increase contribution percentages and participant engagement.
The report notes that plan sponsors face growing responsibilities, highlighting a need for more education. Over half are unaware of their fiduciary roles, and one-third lack understanding of their target date funds (TDFs), despite their widespread use. Nearly 80% believe their plans should generate retirement income, with 61% considering adding in-plan income options this year.
Action steps to improve plans
To maximize the effectiveness of their offering, the report said plan sponsors should consider embracing proactive plan design strategies that cater to the diverse needs of a multi-generational workforce, including leveraging automatic features and investment defaults to enhance participant engagement and satisfaction.
As retirement income solutions become increasingly central to DC plans, plan sponsors are encouraged to establish clear objectives for in-plan solutions, carefully assessing which products best align with their goals and participant demographics to meet the growing demand for income-generating investments.
Enhancing participant education and communication is also crucial, as fewer than half of respondents express high satisfaction with their providers’ efforts in this area. By streamlining the participant experience through seamless integration of educational resources and robust communication strategies, plan sponsors can empower participants to make informed decisions, particularly during critical phases such as onboarding and retirement preparation.
“Our survey highlights the importance for plan sponsors to refine their offerings by embracing thoughtful design and making strategic investments, which can greatly enhance participants’ retirement readiness,” said Meghan Conklin, Vice President, Retirement Insights, at J.P. Morgan Asset Management. “Understanding how regulatory advancements, such as SECURE 2.0, can be leveraged effectively in plan design is crucial, ensuring that options not only complement but also adapt to a more modern workforce.”
For more information about the survey findings, visit the DC Plan Sponsor Survey Findings dedicated website.
SEE ALSO:
• Participants Hit All-Time Savings High in Vanguard’s ‘How America Saves’ Report
• Demand for Retirement Income Planning Rising: Edelman Study
• From Boomers to Gen Z: How Each Generation Processes Retirement
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.