Sponsors’ data shows that their retirement plan participants simply aren’t prepared for retirement.

Retirement plan sponsors are taking a greater interest in their participants’ retirement outcomes, according to Fidelity’s fifth annual Plan Sponsor Attitudes survey. In fact, getting employees ready for retirement is their No. 1 goal for the first time since Fidelity started the survey.

Goals that have been high on the list in the past, according to Jordan Burgess, head of defined contribution investment only business for Fidelity, are reducing business costs related to the plan and using plans to attract employees.

One reason for the change in focus, Burgess suggested, was that sponsors’ data shows that their retirement plan participants simply aren’t prepared for retirement. The survey found 54% of sponsors said their participants don’t save enough, and 58% said they’re delaying retirement because they haven’t saved enough, he said. “There’s some hard data there that says they’re looking at this, and the numbers aren’t positive.”

Advisors and the work they’ve done with sponsors to increase awareness about the importance of improving retirement outcomes are also likely responsible for sponsors’ growing altruism, according to Burgess. “What we’ve seen in our survey over the last three or four years is a growing utilization of advisors in the 401(k) DC market,” Burgess said. The current survey found about 90% of sponsors are working with an advisor.

Sponsors are also more likely to say they are satisfied with their advisor, he added. “The other part is that their expectations of what they want from the advisor have gone up dramatically in terms of a knowledgeable advisor in the DC space. One hypothesis here is that between looking at their own plan data and also based on the work that the advisors have done with them, we’re starting to see a shift in their mindset.”

Burgess suggested that because they’ve been working with advisors, “They’ve straightened out the funds in the plan over the last couple of years. They’ve addressed their fiduciary responsibilities. They’ve focused on fees, and now we’re starting to see some changes in what they’re planning to do going forward with plan design changes.”

Although satisfaction with advisors is high — 66% of sponsors said they were happy with their advisors — the survey found about 13% said they were thinking about switching advisors, up from 10% last year, Burgess said. “The biggest driver of that switch was wanting a more knowledgeable advisor. The reason I think that’s important is it’s the specialist, the knowledgeable advisor, that seems to be focusing on the things that matter most to them.”

Those things include fiduciary duties, plan performance, plan design and cost reduction, he said.

The survey found sponsors are approached by advisors looking for new business on average five times a year, so it’s important for advisors to make sure they’re meeting their sponsor clients’ expectations.

To help advisors do that, Fidelity asked respondents what they were looking for and found most wanted help measuring their participants’ progress. The survey found 68% of sponsors said they’re thinking about implementing changes in their plan design. Those changes include automatic enrollment and escalation programs, and “implementing or restructuring” an employer match, according to Burgess.

One way advisors could help their sponsor clients is to help them define appropriate outcome goals like a target replacement rate. Burgess said 66% of sponsors don’t have a clear savings or retirement income goal for the plan.

Although sponsors clearly want their advisors to have retirement expertise, investment expertise is also important to them. Two-thirds of sponsors said they changed their investment lineup in the last two years, up from just over a third in 2012. Fidelity suggested advisors establish regular meetings with sponsor clients that focus on the components of the investment menu.

In addition to regular meetings, advisors should provide progress reports that include performance in the plan and activities completed on its behalf. Less than 20% of respondents said their advisors provided such reports.

“Most advisors have not done a great job actually documenting, demonstrating and telling a plan sponsor about all the work they’ve done on behalf of the plan,” Burgess said. “In some ways there’s a risk that they’ve done all this great work, but there’s a third that aren’t satisfied and a slight uptick in the amount that might switch. In a very competitive space, that’s something that advisors are going to have to pay close attention to.”

— Check out Almost Half of Boomers Think Retirement Plans Are Free on ThinkAdvisor.