A study of government retirement plans
A large-scale survey finds that governmental defined contribution plans need better service to improve the retirement outlook for millions of public workers.
Understanding government plan sponsors
Lincoln Financial conducted a comprehensive study of more than 4,100 plan sponsors to better understand how government defined contribution plans differ from the rest of the industry. With responses from all areas of government, the findings show government plans significantly lagging other plans and highlight the need for better service to reverse these trends.
Key findings include:
- Plan sponsors know they could be doing a better job, especially when it comes to improving plan participation and increasing deferral rates.
- Plan sponsors are deeply dissatisfied with their plan providers, consultants and advisors because they aren’t focused on what’s important to them.
- Government plans will make changes to pursue better service and better results. Most plan sponsors surveyed plan to meet with a competitor within the coming 12 months and may make a change, if evidence exists of better potential outcomes for the plan.
Serving this market with better solutions
Plan providers, consultants and advisors can reverse plan sponsors’ deep dissatisfaction and build lasting relationships by acknowledging the plans’ needs and committing to better service. That involves:
Adopting a more collaborative approach
Government plan sponsors hold plan providers, consultants and advisors equally accountable for delivering the service they want. Working collaboratively keeps providers and advisors better aligned with the plan sponsor’s goals while fostering trust and understanding, which ultimately leads to a better plan sponsor experience.
Treating each plan individually
Government plan sponsors face a myriad of challenges as it relates to their retirement benefits, such as the relationship between the defined benefit and defined contribution plans, their participant demographics, the pension funding status, and the availability of Social Security benefits. Plan providers, consultants, and advisors can build long-term relationships with government plan sponsors by recognizing what’s important to these plans and tracking it closely. Data keeps the conversation focused on results and strategy to optimize and personalize the plan sponsor’s experience.
Focusing on results-oriented solutions
Like other plan sponsors, government plan sponsors want strong results. That means plan providers, consultants and advisors should draw upon their experience to share what works, including an omni-channel approach that helps participants stay connected to their plan at any time; technology that furthers the reach of plan design features; and one-on-one guidance that personalizes the savings messages and drives positive outcomes.