Evolving Risks, Structure and Strategies in Retirement Plan Governance
2016 Willis Towers Watson U.S. Retirement Plan Governance Survey
This research explores four areas critical to effective plan governance: risk management, levels of governance, strategy and the measuring of plan effectiveness.
Three major trends emerge from the survey findings:
- Employers have a growing concern over retirement benefit adequacy and financial well-being. Defined contribution (DC) and defined benefit (DB) plan sponsors are increasingly concerned about the ability of their employees to retire in a timely manner. In fact, given the business implications such as a stagnant workforce, potentially higher labor costs and lower productivity, 39% of respondents view retirement readiness as a risk today, and 44% view it as a risk two years from now.
- More employers are using third parties to assist with investment-related activities. A large majority of employers engage third-party advisors to assist with investment decisions related to their DB and DC plans.
- Regulatory concerns are prevalent. Plan sponsors continue to cite regulatory concerns as a key risk and with good reason. Over the past two years, approximately 31% of sponsors have faced a government audit of their plan(s), and larger plan sponsors report an even higher likelihood for audits.