Defined contribution plan providers desiring to attract the attention of mega-plan sponsors and become their provider of choice need to better assist participants reach their retirement goals, new research reveals.
Cogent Research, Cambridge, Mass., discloses this finding in a new report, “Retirement Planscape 2012.” The annual study is based on a representative survey of more than 1,500 DC plan sponsors across all plan sizes and industries.
Among the top 35 leading DC plan providers, Fidelity Investments and Vanguard rival each other for best-in-class position in the areas that matter most to mega-plan sponsors. The areas include ease of doing business and demonstrating good value for the money, in addition to participant retirement support.
Also notable for their ability to convey strength in these areas, the Cogent Survey finds, are broad DC market players T. Rowe Price, Charles Schwab and J.P. Morgan, as well as more specialized firms such as Hewitt Associates, Mercer and ING.
“Mega-plan sponsors represent large organizations, many of [which] have made the difficult decision to cut back on defined benefit pension benefits in recent years,” says Linda York, Cogent’s director of syndicated research in a prepared statement. “As a result, they are more concerned about helping participants reach their goals through the DC plan than their smaller plan counterparts.
“This is not to say that service and support or brand recognition is not important to mega-plan sponsors, but it is clear that participants’ needs trump everything else in this market segment,” she adds.