The coronavirus pandemic has introduced a “make-or-break” second for retirement plan suppliers and a brand new examine from J.D. Energy says the business has room to ramp up offering steering to members.
J.D. Energy’s newest U.S. Retirement Plan Participant Satisfaction Examine, based mostly on responses from 10,159 retirement plan members in February and March, examined investor satisfaction based mostly on six components. These components embody engagement on dwell and on-line channels; funding and repair choices; and charges and bills.
“The COVID-19 pandemic struck the U.S. right in the middle of the fielding period for this study, and it is crystal clear in our data that, as market turmoil increased, investor sentiment and economic outlook declined sharply,” Mike Foy, senior director of wealth administration intelligence at J.D. Energy, stated in a press release. “This left many retirement plan participants searching for answers and guidance that was simply not provided by their provider. At this critical time, plan providers are largely failing to provide the guidance needed by participants to make smart decisions to help them prepare for retirement.”
Among the top-level findings within the J.D. Energy examine: 29% of respondents stated they have been both unaware that retirement recommendation is accessible or they thought it was unavailable to them; 15% of members stated they’d obtained a private communication through their supplier’s cellular app; and 22% of respondents stated they’d not interacted with their retirement supplier prior to now 12 months.
“This is a problem for providers because frequency of interaction is directly correlated to participant satisfaction,” J.D. Energy’s examine stated.
The report ranked plan suppliers in three classes “based on their overall mix of business in terms of average plan size.” Bank of America and Charles Schwab ranked highest in a tie, and Principal Monetary Group was third, within the giant plan phase, based on J.D. Energy. Bank of America, Charles Schwab and OneAmerica led the medium-plan phase, the report stated, and Constancy Investments, AIG Retirement Companies and Nationwide have been tops within the small-plan phase.
“It’s impossible to overstate the financial implications for firms that get the participant satisfaction formula right during this make-or-break moment,” Foy stated. “Historically, some plan providers have been focused only on the plan sponsor and, while that is changing somewhat, firms need to be laser focused on participants as well.”
Mike Scarcella is a senior editor at ALM in Washington, D.C. Contact him at [email protected] and on Twitter @MikeScarcella.