The survey, which polled more than 500 DC plan sponsors, found employers are asking their DC plans to deliver more than ever, including enhancing the employee experience (69 per cent) and improving retirement outcomes (63 per cent). Three in four ranked retirement savings as a core or top priority within total rewards.

However, the survey found many plans are still measured, governed and delivered for a different era, leaving a gap between what employers expect and what their plans are built to achieve. Sponsors are reassessing governance, resources and plan design to move beyond commitment to impact.

“The retirement outcomes gap is a call to action,” said Chris West, senior managing director and defined contribution strategy leader at WTW, in a press release. “Employers have invested heavily in retirement programs, but the next challenge is proving these programs are moving employees closer to retirement readiness. Advanced analytics can help sponsors see where gaps are emerging and what actions may matter most, leading to more impactful solutions and better outcomes.”

As cost pressures persist, employers are looking for changes that make plans more relevant, flexible and aligned with retirement readiness goals. Indeed, half of plan sponsors said minor or moderate retirement plan design updates are needed.

One in five plan sponsors said they’re looking to delegate future delivery support, transferring administration and fiduciary responsibilities so their teams can spend more time on strategy focused on improving participant outcomes.

The survey also noted while plans have gotten better at helping employees accumulate savings, more support is needed to help employees transition into retirement. To enhance support, three in 10 plan sponsors said they’re planning to offer an in-plan retirement income solution.

Employers are also increasingly considering artificial intelligence as a solution to some challenges. Nearly four in five (79 per cent) said they’re willing to use AI for plan analytics, while 73 per cent said they’re considering using the technology to automate routine processes and 72 per cent said it can help personalize employee communications.

However, only 37 per cent said they’re willing to use AI for compliance and risk management and roughly a third said they’d use it for recordkeeper oversight (33 per cent) and fiduciary governance (29 per cent). Three-quarters (74 per cent) cited data privacy and security as the most common reservation around the use of AI.

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