WTW: Employers Seek to Expand Plan Value—Not Cost

While retirement plan accessibility continues to improve, plan value remains top of mind for many sponsors.

According to the recently published WTW 2026 Defined Contribution Survey, half of employer respondents said “minor” or “moderate” retirement plan updates are needed to improve plan impact upon participants, rather than compete overhauls. A very small proportion (7%) of respondents reported they were considering allowing—or planning to allow—employees to redirect their retirement contributions. Among those respondents, popular choices included contributions being directed toward health savings accounts (51%), student loan repayment (50%), dependent care flexible spending accounts (25%), healthcare premium reductions (23%) and Trump Accounts (18%).

At the same time, employers reported shifting their focus from the managing the “day-to-day” to devising “strategic plan design,” says Chris West, a senior managing director and defined contribution strategy leader at WTW. She says “pressure is mounting” for employers to reevaluate how well their plan is working for their employee base.

Among respondents to WTW’s survey, 63% cited “improving retirement outcomes” as one of their top objectives within the next two years. Some 60% of plan sponsors had a working definition of retirement readiness, split almost evenly among income replacement (40%), retiring on time (39%), and retirement confidence (39%)—they were able to select more than one option.

A sponsor “can’t really prove that [its] plan is working for [a participant] if [it hasn’t] really defined what that actually means,” West says, suggesting plan sponsors establish goals for their participants.

As employers work through their definitions, West adds that they are likely also trying to delegate some of their administrative responsibilities.

Sponsors saw using artificial intelligence as part of the answer to improving their plans—at least in certain areas. Nearly 80% of respondents said they were willing to leverage AI for plan analytics, 73% to automate processes, and 72% to enhance or personalize participant communications and education. Employers’ willingness to use AI waned as the stakes rose: Only 37% were willing to use it for compliance and risk, 33% for recordkeeper oversight, and 29% for fiduciary governance. Concerns about data privacy and security were employers’ most common reservations, aligning with sentiments expressed in a recent survey of public defined benefit plan sponsors.

AI can “crunch the numbers,” West says, but it “can’t take the stand in a fiduciary lawsuit.”

The survey was fielded from April 15 through May 22 among 547 U.S. DC plan sponsors. More than 60% of sponsors held at least $1 billion in assets, 42% had at least 10,000 employees, and 72% also managed a defined benefit plan.