Plan Sponsors Recognize the Value of Fiduciary Oversight: Survey

In what may come as no surprise, a new survey that looks at plan sponsor attitudes toward retirement plan management finds that plan sponsors that use outsourced fiduciaries highly value the service as an important backstop. 

When asked what resources they currently use to help manage fiduciary responsibility for their retirement plan, more than 6 in 10 plan sponsors say they use a professional investment advisor and 3(16) administrative fiduciary because it provides not only an objective check on decision making, but also provides sponsors “with greater peace of mind and a compliant, well run plan.”

Overall, more than 50% of plan sponsors indicated that they use a professional fiduciary to outsource plan governance and oversight.

The findings in the study were released as part of Pentegra’s third annual 3(16) day. In January 2024, the firm conducted the survey of retirement plan sponsors to examine how they are using fiduciary outsourcing to help better manage their retirement plans. It also captured their perspectives on what outsourcing does to help them better position their plans and drive improved outcomes.

In fact, when plan sponsors were asked what’s the most difficult part of managing their retirement plan, the top answers were:

• finding time to manage plan administrative responsibilities; 
• keeping up with legislation and ensuring their plan is compliant; and 
• understanding the scope of their responsibilities as a plan sponsor.  

To that end, the survey found that more than 70% of plan sponsors say they find managing the details of their retirement plan a distraction from their core business. 

Plan sponsors that outsource fiduciary support were also found to be more confident that their retirement plan is achieving successful outcomes, with more than 50% agreeing that “because we chose the right 3(16) and 3(38) fiduciaries, we are confident in our plan design and the focus on participant outcomes.” 

Similarly, more than 50% of plan sponsors indicated that they employ a total-benefits outsourcing approach that includes retirement, health, welfare and insurance management to help reduce their workload and elevate their benefit offerings. 

“Today, retirement plan administration has become increasingly complex. There are new regulations and increasing compliance burdens,” stated Pentegra Executive Vice President Matthew Mintzer. “For many employers, as well as their retirement plan advisors, the time commitment can be overwhelming and distracts from the more critical responsibility of running a business—time that could be better spent focusing on growth and profitability.” 

Pentegra’s survey was conducted from Dec. 1, 2023, through Jan. 12, 2024, with responses from 81 plan sponsors nationwide.