Sponsors Prioritize Data Security, AI to Personalize, Protect Plans

Retirement plan sponsors are rethinking their strategic priorities. While reducing plan costs has been a dominant theme in recent years, only 40% of sponsors cited that as a key focus for 2025—down from 50% in 2024. Instead, the latest “Retirement Planscape” report from Escalent’s Cogent Syndicated division highlights a growing emphasis on the need for cybersecurity and on the potential of artificial intelligence to reshape the retirement experience.

Escalent, a data analytics and advisory firm, plan sponsors respondents to describe one product or service they wish they had access to from their current plan provider or DC investment manager.

Cybersecurity Fears Outpace Other Concerns

Security threats came out as a top concern, according to the survey. In the past year alone, 7% of all plan sponsors—and 10% of the sponsors of largest plans—reported experiencing a 401(k)-related data breach. More than half (52%) of respondents ranked cybersecurity as their No. 1 concern, ahead of underperforming investment options (45%) and inadequate employee savings (43%).

For written cybersecurity policies, the three most commonly implemented protocols include:

• Multifactor authentication: 45%;
• Cybersecurity insurance coverage: 38%; and
• Annual risk assessments: 34%.

Larger plans tend to adopt more comprehensive policies. For example, 38% of respondents from the largest plans said they include periodic cybersecurity training for employees and participants, compared with just 22% of micro plans.

In the event of a breach, most sponsors reported contacting their plan provider first, followed by notifying law enforcement, insurers and participants. These steps reflect the seriousness with which sponsors now approach digital risk.

AI Goes Beyond Trends to Transformation

Despite growing cybersecurity concerns, optimism about AI is rising. The report found that two-thirds (66%) of plan sponsors managing at least $100 million in assets said they believe AI can enhance the experience for participants through personalized tools, interactive planning simulations and virtual assistants that can handle routine 401(k) inquiries.

Large- and mega-plan sponsors are taking the lead, viewing AI not just as a support tool, but as a strategic asset capable of delivering tailored, data-driven solutions. When asked about desired innovations, many sponsors cited AI-enabled services. One mega-plan sponsor requested “AI-powered real-time investment trackers and advice,” while a smaller sponsor expressed interest in “fully-integrated AI financial advisers.”

“With cost pressures easing, plan sponsors can take a more strategic view,” said Sonia Davis, the report’s lead author and a senior product director in Escalent’s Cogent Syndicated division, in a statement. “The rising enthusiasm around AI presents an opportunity for providers to invest in tools that improve the 401(k) experience with increased support, education, and a higher degree of personalization.”

However, the report concluded, innovation must be balanced with prudent risk management. As the retirement industry evolves, sponsors and providers will need to collaborate closely to implement change responsibly.