Findings about retirement plan sponsors in healthcare
A national study reveals that plan sponsors in healthcare aren’t so singularly focused on costs, but do expect more from plan providers.
Understanding the needs of plan sponsors
Lincoln Financial conducted a national study of more than 500 plan sponsors in healthcare organizations to understand their current goals and priorities and to gauge how well plan providers meet expectations. Key findings include:
- Plan sponsors in healthcare organizations are keenly focused on improving retirement readiness, and they expect plan providers to focus on these same objectives. Their top priorities include plan sponsor service and participant communication/education, followed by plan design, while cost ranks much lower. (See Figure 1.)
- Plan providers are falling short of plan sponsors’ expectations. Less than half of plan sponsors indicate that their needs are met by providers, and fewer say participants’ needs are met. In fact, plan sponsors point to both as their areas of greatest dissatisfaction with plan providers, well ahead of cost. (See Figure 2.) As an alternative, plan sponsors highlight the value of a more individualized approach to service delivery for plan sponsors and participants alike.
- Plan sponsors are reluctant to change plan providers, but point to service as their top reason for making any change. In fact, fewer than 10% of plan sponsors issue RFPs based on fees. At the same time, cost will factor into the decision to change if they don’t get the service they need for what they pay.
Deliver a better experience
The findings from this study reveal several opportunities for plan providers. As an industry, we can deliver a better overall experience for retirement plan sponsors in healthcare organizations by providing:
An attentive, proactive service model. Plan providers who listen, understand their clients’ goals, and find targeted solutions to help them achieve those goals will increase satisfaction and build lasting relationships. The key is expert execution in those areas that plan sponsors view as critical, with a special focus on plan sponsor service and retirement readiness.
Participant communications that acknowledge the individual. Meaningful, motivating communications start with an understanding of plan participants. We know from our proprietary research that healthcare participants tend to engage with their plans less frequently than other participants, but they agree with plan sponsors that meeting one-on-one with a financial professional motivates them more than anything. Most importantly, a highly personalized approach needs to go beyond meetings and apply across all participant touchpoints—on the web, in customized printed communications, and by phone.
Plan design solutions. Automatic enrollment and auto-escalation features, along with graduated match formulas that stretch employer contributions, are widely accepted by plan sponsors as effective in increasing participants’ savings rates. Plan providers capable of delivering auto-solutions are well-positioned to drive higher plan sponsor satisfaction and help participants move closer to achieving retirement readiness.
The full study delves into more detailed findings around each of the key themes and recommendations. Together they provide an approach to service delivery that clearly focuses on plan sponsor needs and priorities to build lasting, more productive relationships.