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Retirement Planning > Saving for Retirement > 401(k) Plans

Retirement Plan Study Finds Benefits to Using a Single Recordkeeper

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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.

Seventy-three percent of sponsors working with one recordkeeper also said employees were engaged with their retirement benefits, versus 62% of their peers working with more than one.

“The study shows that plan sponsors are seeing the value in robust retirement and financial wellness solutions from one plan provider,” Kevin Morris, vice president and chief marketing officer for retirement and income solutions at Principal, said in a statement. 

“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.”

Survey participants with multiple providers reported administrative drawbacks to their retirement plan setup. Forty-six percent said they needed an additional staff member to coordinate accounts.

Other administrative drawbacks included more effort to integrate plan data, more time and effort for nondiscrimination testing and need for additional resources to manage benefits.

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 sponsors with one recordkeeper said they provide employees with access to an end-to-end view of their retirement savings, compared with 58% of those with multiple recordkeepers.