Background: MFS Investment Management (MFS) has explored employer views through a robust survey of 166 plan sponsors, representing over $125 billion in plan assets and over 1.1 million participants. This study gathered plan sponsor perspectives on retirement confidence, retirement income, as well as thoughts on overall investment menu and plan design.

Findings: We asked plan sponsors about their overall confidence levels and concerns when it comes to their participants’ retirement. We queried their areas of focus for the next 12 months, what’s keeping them up at night, competing financial priorities, litigation fears, and their thoughts on who should be responsible for certain actions when it comes to their DC plans. Only 18% of plan sponsors were very or extremely confident that their participants would be able to retire at the age they want to. This is lower than last year’s results (23%) and it is more pessimistic than the participant view, with 36% of participants very or extremely confident they will be able to retire at the age they want to.

Source: 2024 MFS DC Plan Sponsor Survey; click here for methodology.

We see some distinctions by plan size and type. For example, 35% of plan sponsors that also have a defined benefit (DB) plan are very/extremely confident versus just 6% of DC-only plan sponsors. When it comes to plan size, only 5% and 7% of small- and medium-sized plans, respectively, are very or extremely confident versus 24% of large plans.

The top three issues keeping plan sponsors up at night are the changing regulatory and legislative landscape (71%), litigation risk (49%) and overall plan administration burdens (40%).

Bottom line: We have developed a plan sponsor confidence grade called the MFS Workplace Retirement Readiness Indicator. The grade is based on a subset of survey questions focused on plan sponsors’ views on their participants’ ability to confidently retire and reach desired participant outcomes. The average grade for the 2024 Indicatoris a C+, indicating relatively low plan sponsor confidence in their participants’ retirement readiness. Our report identifies several ways in which plan sponsors can improve their overall confidence grade, such as through changes to plan design, reviewing their investment lineup, and providing participants with access to advice.

Insights shared by guest contributors are their own and do not represent the views of DCIIA or the RRC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

FOR INSTITUTIONAL AND INVESTMENT PROFESSIONAL USE ONLY

Distributed by: MFS Institutional Advisors, Inc. (“MFSI”), MFS Investment Management and MFS Fund Distributors, Inc., Member SIPC, Boston, MA.

MFS Investment Management nor its subsidiaries are affiliated with Retirement Research Center (RRC) a DCIIA organization.

The views expressed are subject to change at any time. These views are for

informational purposes only and should not be relied upon as a recommendation to purchase any security or as a solicitation or investment advice from the Advisor. No forecasts can be guaranteed.