Although the significant majority of the 154 advisers surveyed by Putnam Investments said plan participants in the plans they manage are continuing to contribute to their 401(k) accounts, 21.1% said participants are decreasing their contributions to their plans.
Plan sponsors appear to be keeping their retirement plans generally intact; 84.6% of advisers said their plan sponsor clients are continuing to provide the matching contributions at the current level.
However, some advisers indicated sponsors are delaying auto-enrollment decisions (7.4%), continuing to provide profit-sharing contributions (5.4%), and delaying adoption of the QDIA-sanctioned investment options (2.7%).
Most advisers think plan sponsors’ fiduciary concerns have increased from last year. In fact, 17.7% of advisers reported plan sponsors’ fiduciary concerns have increased significantly, while 58.9% said only that concerns have increased, and 23.4% said the concerns have stayed the same. No advisers indicated that plan sponsors’ fiduciary concerns have decreased.
The number of advisers who choose to act as fiduciary or co-fiduciary versus those that do not is relatively split. According to the survey data, almost half of advisers now act as fiduciary or co-fiduciary for the plans they manage, and 51% do not sign as fiduciary.
Default Fund Recommendations
Nearly all (91%) advisers primarily recommend target-date and target-risk funds as default plan investment options. When recommending target-date funds, asset allocation is the most important criterion (after performance) for about 36% of advisers. After asset allocation, the next largest criteria were expense ratios (17%), glide path (13%), and a track record of more than three years (13%).