In understandably anxious times for 401(k) participants, which companies are consistently communicating in a quality manner about COVID’s effects on retirement plans and planning?
Workers are looking to their advisors and plan providers for decision-making help, and nearly six in 10 participants say the pandemic has affected their investment decisions. Nearly one-third cite the pandemic as the primary reason for decreasing their contribution levels.
These and other findings are from DC Participant Planscape, an annual study from Cogent Syndicated sibling Escalent, a “human behavior and analytics firm.”
In the midst of market volatility, participants have upped their reliance on financial advisors, provider websites and social media for retirement education and support.
In fact, over one-fifth of participants are expecting to change their investment mix and contacted their DC plan advisor or retirement plan representative for guidance on the best course of action.
“Employers have been forced to make difficult decisions affecting their employees, including layoffs, furloughs, salary reductions and company match decreases,” Linda York, SVP at Escalent, said in a statement. “This leaves many DC plan participants to fend for themselves as they try to salvage their retirement savings. The DC plan providers that have stepped up to offer help are positioning themselves as go-to resources for retirement planning and guidance in the months and years to come.”
Top Five Firms for Participant Satisfaction with COVID-19 Communication
| 1. Bank of America – 69% |
| 2. AIG Retirement Services (formerly VALIC) – 62% |
| 3. Charles Schwab – 57% |
| 4. T. Rowe Price – 57%* |
| 5. Fidelity Investments – 57%* |
*Ranked fourth and fifth due to rounding
“While account balances have largely recovered from the wild market swings of March and April, the pandemic could have drastic impacts on the ability of individual participants to retire when and how they want to,” York added. “Providers who say they are acting in participants’ best interest need to up their game and broaden their focus beyond the retirement plan to incorporate impacts on Social Security, Medicare and other outside investments into the planning support they offer.”
Cogent Syndicated, a division of Escalent, conducted an online survey of a representative cross-section of 5,025 DC plan participants from May 7 to May 29, 2020.