The Hottest Topics in Retirement Wellbeing for 2025
As only a quarter of plan sponsors today offer defined benefit (DB) pension plans, most workers depend on their employer to offer retirement savings vehicles. This means that retirement accounts like 401(k)s are even more important in providing financial and retirement security for employees down the line.
Current retirement legislation, like SECURE 2.0, has also proven critical for those wanting to either expand on contributions or even withdraw from their accounts—both impacting long-term savings. With select provisions not available until 2027, its likely plan sponsors will continue to evolve their retirement plans in the years ahead.
Financial wellness is another leading trend in the new year. Employees are increasingly focusing on short-term savings, budgeting and debt, and are taking an interest in growing long-term savings through lifetime income.
Alight’s latest study on hot topics in retirement analyzes these themes, along with other leading trends, within defined contribution (DC) retirement plans. It also features responses from over 120 employers with nearly four million workers.
See the next pages for Alight’s top three leading themes in retirement for 2025.
Next: Financial wellness products see significant growth
Financial wellness sees significant growth
For 2025, nearly all employers (92%) surveyed in Alight’s study plan to stretch their financial wellbeing programs outside retirement planning, as more admit that the importance of financial wellness has received more attention in their workplace than decreased (63% vs. 3%).
These focuses include an attention on budgeting, debt management, estate planning, and Social Security optimization. Others say that for 2025, they will incorporate education on the basics of financial markets, simple investing, etc. (64%), while others will provide healthcare education and planning (48%), assistance post-retirement for programs (30%), and help in establishing emergency savings (27%).
More employers are offering these tools and features as employees demand it in their workplace plans. Thirty eight percent of employees say employers should provide a tool in helping workers establish savings goals, while 35% believe they should offer education with this topic. Others want tools or education in maximizing asset growth (34% vs. 42%), budgeting (29% vs. 36%), understanding insurance (27% vs. 52%), saving for an emergency expense (26% vs. 38%), and understanding investment vehicles (25% vs. 49%), among others.
One feature continues to see little attention from employers. Even with recent SECURE 2.0 legislation and despite a strong interest from employees, plan sponsors are not prioritizing student loan assistance, reports Alight. Employers say they are “not at all likely” to offer student loan consolidation (51%), student loan repayment assistance (67%), college savings facilitation (58%), or employer money to defined contribution plans (55%).
Next: Selectively adopting SECURE 2.0
Selectively adopting SECURE 2.0
Employers are carefully adopting some optional provisions of SECURE 2.0. According to Alight, currently, about 30% have incorporated hardship self-certification, while another 15% say they will definitely add it in the future.
Only 1% of employers have incorporated the $2,500 emergency savings sidecar to their plans, and none have committed to adding it to their plans soon.
A smaller number have incorporated employer matches to Roth, and only 8% are absolute about implementing it in 2025.
Pooled employer plans (PEPs), once a hot topic, are also not seeing much traction among employers. An overwhelming 93% of employers say they are not interested in adding the tool, and nobody surveyed said they would join one in 2025.
When asked why they wouldn’t adopt some provisions, many plan sponsors say they are seeking additional legal guidance before implementing. For example, employers want more legal clarity before adding the Saver’s Match contribution (43%), non-elective employer contributions to Roth (50%), and the $2,500 Roth sidecar emergency savings provision (40%).
Next: Gradual interest in lifetime income
Gradual interest in lifetime income
Interest in lifetime income options is slowly increasing, with 15% of employers wanting to add a non-guaranteed lifetime income option this year, and nearly 10% of employers planning to incorporate annuities to their plans in 2025.
Despite the gradual rise, over half (53%) of employers still say they are not interested in non-guaranteed income options in their DC plans. When asked why, top apprehensions include fiduciary concerns (49%), operational or administrative concerns (48%), difficulty with participant communication (40%), and cost barriers (26%).
Another 43% say they are not interested in annuities in DC plans, either because of operational or administrative concerns (51%), fiduciary concerns (48%), difficulty with participant communication (46%), and cost barriers (25%), among others.
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