- Sponsors Using One Recordkeeper Save From 17% To as Much as 50% More Time Compared to Those With Multiple Providers
Principal Financial Group revealed survey results showing that plan sponsors using a single recordkeeper to manage multiple retirement plans see better overall time savings and fewer administrative drawbacks when compared to sponsors using multiple providers. Respondents with one provider also reported higher rates of employee satisfaction and engagement with retirement benefits.
For the study, NMG Consulting surveyed over 300 plan sponsors with a defined contribution plan and at least one other retirement plan, including: defined benefit, stock plan, or non-qualified deferred compensation. Depending on the type of plan, sponsors with one provider reported time management savings of at least 17% to as much as 50%–the equivalent of nearly three workweeks. Meanwhile, 75% of plan sponsors with multiple providers said they would save time by using one provider.
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More sponsors with a single provider also cited higher participant satisfaction and retirement plan engagement. Seventy-three percent of respondents with one recordkeeper put employee satisfaction in their retirement benefits as a top three business outcome, compared to less than two-thirds (60%) with multiple providers. Nearly three-quarters (73%) of sponsors working with a single recordkeeper cited stronger employee engagement with their retirement benefits, above peers working with more than one (62%).
“Principal study shows that plan sponsors are seeing the value in robust retirement and financial wellness solutions from one plan provider,” said Kevin Morris, vice president and chief marketing officer, Retirement and Income Solutions at Principal. “The ability to offer customized solutions under a single roof provides a more seamless and efficient experience for everyone, which in turn leads to better retirement savings outcomes.”
Respondents with multiple providers cited administrative drawbacks to their retirement plan setup, including nearly half (46%) needing someone additional on staff to coordinate accounts. Other administrative pain points included more effort to integrate plan data, more time and effort for non-discrimination testing, and the need for additional resources to manage benefits.
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Plan sponsors working with one provider also reported fewer touchpoints for participants to view or make changes to their retirement accounts, according to the survey. Seventy-three percent of plan sponsors using a single recordkeeper said they provide their employees with access to an end-to-end view of their retirement savings, compared to 58% with multiple recordkeepers.
Time saving was highest when matching defined contribution plans with defined benefit plans (50%), followed by stock plan solutions (30%), and nonqualified deferred compensation (17%). Those percentages equate to as many as 14 business days to at least 4 business days.