By Paula Aven Gladych
Companies that sponsor 403(b)
plans, who partner with a professional retirement plan advisor, see higher participant outcomes, according to a survey by the Retirement Advisor Council.
The survey of 407 key decision makers for plans with between $5 million and $500 million in plan assets was conducted online in September of last year with funding and research oversight by Fidelity Investments, Franklin Templeton Investments, John Hancock Investments, MFS Investment Management, MassMutual Retirement Services, Principal Financial Group and Transamerica Retirement Solutions.
It found that more than four in five plans that partner with an advisor dedicated to retirement plans
saw employee contribution rates rise in the last two years.
Among plans with a professional retirement plan advisor, one-third saw the average employee contribution rate grow by 6 percent of pay or better. Three-quarters of plan sponsors that partner with a professional retirement plan advisor estimate 50 percent or more of their participants are on track for retirement.
Plan sponsors who partner with a professional plan advisor realize better plan benefits and participant outcomes, said Grace Basile, assistant director of research for Transamerica Retirement Solutions, during a teleconference. They also don’t have to spend as much time running their plan, pay less in fees and don’t have to worry about complying with all of the rules governing the industry.
Advisors whose sole focus is retirement plans stand apart in three areas: range of services, the client ratings they receive and plan success measures, said Steve LaValley, second vice president for retirement services for MassMutual Financial Group.
“Exclusive retirement plan advisors meet with clients more than other advisors,” he said. “The majority of sponsors rely on advisors to help with the fiduciary process and making a plan design. Over half of advisors who work with plans provide this type of service.”
Sixty percent of clients think their advisor did an outstanding job. “Not a single client of these said their advisor could improve overall,” LaValley said.
who work exclusively with a plan advisor are more likely to receive retirement readiness reports. Nine out of 10 clients of exclusive retirement plan advisors have taken action in the last two years by either implementing automatic enrollment or plan design changes to benefit retirement outcomes, he added. More than 8 in 10 clients associated with exclusive plan advisors see increases to their employees’ deferral percentages.
The Retirement Advisor Council advocates for successful qualified plan and participant retirement outcomes through the collaborative efforts of experienced, qualified retirement plan advisors, investment firms and asset managers and defined contribution plan service providers.
Originally published on BenefitsPro.com