BOSTON--(BUSINESS WIRE)--Defined contribution plan sponsors, on average, earned a C+ grade when it comes to confidence in their participants’ ability to achieve their desired retirement outcomes, according to the 2024 MFS® DC Plan Sponsor Survey.¹

In all, 84% of employers who only offer self-directed defined contribution plans report being “somewhat” or “very concerned” about their workers’ chances of achieving an adequate and secure income in retirement. Among employers who offer both defined contribution and defined benefit plans, that unease fell slightly, with 65% concerned about retirement income adequacy.

Not surprisingly, most plan sponsors surveyed have evaluated retirement income solutions, the MFS survey found. However, only 17% said they were “very” or “extremely” likely to implement a retirement income solution in the next 12 to 18 months. As to the top reasons why sponsors do not intend to implement a retirement income solution, the survey finds they are happy with their current plan design, or there is low participant demand.

Plan sponsors continue to evaluate their investment lineups, with many considering changes such as reducing or removing options, replacing managers or adding options to their core menu. Furthermore, 69% of sponsors report currently offering advisory services, with 61% indicating that all participants are given access to an advisor and 38% reporting that access is provided through a managed account offering.

“While it's clear that plan sponsors are grappling with concerns about retirement readiness, it’s encouraging to see that plan sponsors are reviewing their investment lineup and making advice more readily available,” said Jeri Savage, Retirement Lead Strategist at MFS. “Plan sponsors who focus on these areas tend to be more confident, our survey found.” She added, “Our 2024 MFS Global Retirement Survey indicated that participants have a higher degree of confidence in their ability to achieve their retirement goals than plan sponsors do, reflecting a broader sentiment that these challenges can be overcome with proper attention and planning.”

Among other key findings from MFS’s second annual plan sponsor survey:

• Only 18% of plan sponsors are “very” or “extremely” confident that their participants will be able to retire when they want, citing contribution rates as the biggest reason for concern. This is down from 23% in last year’s survey.
• While 37% of plan sponsors say participant savings rates are a concern, far more cite the changing regulatory and legislative landscape (71%) and litigation risks (49%) as issues that “keep them up at night.”
• Most plans (53%) continue to offer stable value funds as their capital preservation option, citing their ability to be used in both the accumulation and decumulation stages.
• Most plan sponsors say that their top areas of focus over the coming 12 months are reviewing SECURE 2.0 and adopting appropriate provisions, as well as evaluating their investment lineup.

The MFS survey identified several steps that plan sponsors can take to boost their confidence. For example, since participation and deferral rates are major drivers of confidence scores, employers can look to plan design opportunities, such as utilizing auto features, engagement tactics and policies that can help to boost plan usage. Reviewing the plan’s investment lineup is also a top area of focus in 2025 for plan sponsors who had higher-than-average confidence scores. Plan sponsors who make advice broadly available to their participants also tend to be more confident, so considering adding this type of access in 2025 might also make sense.

“The good news is, there are plenty of steps that plan sponsors can take to encourage better engagement and boost retirement confidence,” Savage added. “Plan sponsors understand, though, that any strategy to improve the retirement readiness of participants has to be personalized, customized, and suitable to their plans.”

60969

Methodology

DCIIA’s Retirement Research Center, an independent third-party research provider, conducted a study among 166 plan sponsors in the United States on behalf of MFS from September to October 2024. MFS was not identified as the sponsor of the study. Survey respondents represent over $125 billion and 1.1 million participants. Survey participants included large (overseeing $1 billion or more), mid-size ($100 million to $999 million), and small (less than $100 million) plans. To qualify, plan sponsors had to offer a 401(k), 403(b), 457 or other defined contribution plan, defined benefit plan or other non-qualified deferred compensation plan.

About MFS Investment Management

In 1924, MFS launched the first US open-end mutual fund, opening the door to the markets for millions of everyday investors. Today, as a full-service global investment manager serving financial advisors, intermediaries and institutional clients, MFS still serves a single purpose: to create long term value for clients by allocating capital responsibly. That takes our powerful investment approach combining collective expertise, thoughtful risk management and long-term discipline. Supported by our culture of shared values and collaboration, our teams of diverse thinkers actively debate ideas and assess material risks to uncover what we believe are the best investment opportunities in the market. As of December 31, 2024, MFS had approximately US$605.9 billion in assets under management.

© 2025 MFS Investment Management. All rights reserved.

¹ This score is based on a subset of questions from the 2024 MFS DC Plan Sponsor Survey that were indicators of higher sponsor confidence in the ability of their participants to retire comfortably. A range of points was assigned to each question based on the relative importance of each question. The maximum score available is 46 points. The average score for all survey respondents was 19.1 points (C+ grade).