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September 10, 2021 at 01:39 PM
What You Need to Know
- Respondents with one provider reported time savings of 17% to as much as 50%, Principal Financial Group found.
- Three-quarters of plan sponsors with multiple providers said they would save time by using only one provider.
- Seventy-three percent of sponsors with one recordkeeper said employees were engaged with their retirement benefits, vs. 62% of their peers with more than one.
Plan sponsors that use a single recordkeeper to manage retirement accounts reported better overall time savings and fewer drawbacks than those that use multiple providers, according to survey results released this week by Principal Financial Group.
Respondents with one provider also reported higher rates of employee satisfaction and engagement with retirement benefits.
NMG Consulting conducted the survey from June 16 to July 28 among 311 plan sponsors with a defined contribution plan, including defined benefit, stock plan or non-qualified deferred compensation.
Depending on the type of plan, sponsors with one provider reported time savings of at least 17% to as much as 50% — the equivalent of nearly three workweeks, according to Principal.
Time saving was highest when defined contribution plans were matched with defined benefit plans at 50%, followed by stock plan solutions at 30% and nonqualified compensation at 17%. Those percentages equate to at least four business days and to as many as 14 business days.
Meanwhile, three-quarters of plan sponsors with multiple providers said they would save time by using only one provider.
Employee Satisfaction
Seventy-three percent of respondents with one provider cited employee satisfaction in their retirement benefits as one of their top three business outcomes, compared with 60% of respondents with multiple providers.
