By WTW 

U.S. employers are facing a clear retirement readiness challenge: they value defined contribution (DC) plans, but many still lack a precise view of whether those plans are helping employees retire on time and with confidence. That is according to the WTW 2026 Defined Contribution Survey from WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. In the survey of 547 U.S. plan sponsors, 60% have a working definition of retirement readiness, split among income replacement (40%), retiring on time (39%) and retirement confidence (39%) (sponsors could select more than one option).

The finding underscores what WTW calls a retirement outcomes gap, now a growing business concern for employers. Employers are asking their DC plans to deliver more than ever: enhancing the employee experience (69%) and improving retirement outcomes (63%) top their objectives for the next two years, and three in four rank retirement savings as a core or top priority within total rewards. But 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, WTW.“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.”

The survey shows where plans stall, and where employers are starting to act:

Averages hide the people at risk. Sponsors often monitor aggregate, plan-level metrics such as participation rates, but fewer break results down by employee group, where gaps in access, savings behavior and outcomes are often most visible.
Plan design is being retooled for impact. Half of sponsors say minor or moderate retirement plan design updates are needed. As cost pressures persist, employers are looking for changes that make plans more relevant, flexible and aligned with retirement readiness goals.
Plan governance continues to evolve. Closing the retirement outcomes gap will require many sponsors to rebalance time and resources spent on administration and governance. One in five sponsors are 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.
Support stops before the finish line. Plans have gotten better at helping employees accumulate savings, but support diminishes when it matters most: the transition into retirement, when workers face critical decisions about their readiness and the prospective distribution and investment options that determine whether savings become sustainable income. To enhance support, 3 out of 10 sponsors are planning to offer an in-plan retirement income solution.
The stakes extend beyond the benefits department. When employees do not feel ready to retire, they often do not, whatever their account balance says, and delayed retirements ripple into workforce planning, succession and talent costs. Employers in the survey consistently tie their retirement objectives to broader workforce goals, including attraction, retention and timely workforce transitions.

The retirement outcomes gap has new urgency as workers are increasingly confronted with large, abstract retirement savings targets. For many Americans, the workplace DC plan is their primary retirement vehicle, which puts employers at the center of translating those headline numbers into something a worker can act on.

Get the report here