Practical analysis for investment professionals
08 February 2024

Plan Sponsor Priorities for 2024: A Seven-Item Checklist

Defined contribution (DC) plans are among the most common ways for US workers to save for retirement. US DC plan programs totaled $9.6 trillion in assets as of the third quarter of 2023 when they represented 22% of all US retirement assets. This creates tremendous responsibility for plan sponsors as they provide and manage retirement benefits on behalf of their employees.

To help plan sponsors, we curated seven topics that we believe they should make top priorities for their retirement programs in 2024.

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1. Complete a Comprehensive Target Date Fund (TDF) Review

Target date funds (TDFs) are a distinguishing feature of DC plans: 85% of plan sponsors offer them. These funds automatically rebalance to become more conservative as participants near retirement. For this reason, TDFs appeal both to plan participants seeking a hands-off approach to managing their retirement savings and to plan sponsors that use such funds as their plan’s qualified default investment alternative (QDIA).

In fact, of the 80% of plans with a QDIA, 86% of them use a TDF. As a result, plan participants often have their entire account balances invested in a TDF. This makes a strong selection process as well as diligent and ongoing monitoring absolutely essential.

The US Department of Labor’s (DOL’s) guidance “Target Date Retirement Funds — Tips for ERISA Plan Fiduciaries” outlines TDF selection best practices. Plan sponsors should review the complete guidance before evaluating their TDF. In our own reading of the guidance, we identified three important questions that plan sponsors should ask themselves. Together, they serve as a litmus test to determine if a TDF review might be warranted sooner rather than later:

  1. Did your initial analysis of investment options consider your company-specific workforce demographics?
  2. Did your initial analysis include an evaluation of multiple TDFs?
  3. Have you reviewed your TDF selection, beyond normal performance monitoring, within the last three years?

If the answer to any of these questions is no, plan sponsors may want to prioritize a TDF review in 2024.

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2. Trending and Trendy vs. Beneficial and Necessary

Articles, conference sessions, and webinars that herald new ideas that will make DC plans “better” can be distracting and often blur the line between marketing and thought leadership.

As an example, historically, most retirement planning communications have emphasized accumulation. In the past two years, they have expanded to “decumulation” strategies that focus on what happens after retirement. This has created a wave of sponsored content promoting in-plan annuity or “lifetime income products.” Despite the supposed popularity of such products, only 9.9% of plans actually offer them to their plan participants.

The industry is in the midst of a rapid innovation cycle propelled by the Setting Every Community Up for Retirement Enhancement (SECURE) 2.0 Act of 2022, increased competition among service and product providers, and other secular trends. It is an exciting time, and much of what is being developed may serve plan participants well in the future. But plan sponsors have to maintain their discipline and embrace a holistic, goals-based approach when they evaluate trending DC plan products, features, and solutions.

3. Offer Comprehensive Employee Financial Education Resources

To recruit and retain top talent, plan sponsors must customize their financial education strategy to the needs of a diverse and evolving workforce. Different generations of workers engage with educational content in different ways: Some prefer in-person meetings, videos and articles, or one-on-one sessions. What resonates with someone early in their career may not work for someone approaching retirement. As a result, plan sponsors must target, differentiate, and vary their education methods to engage all their employees.

A well-managed retirement plan supplemented by comprehensive financial education resources can be a critical recruiting and retention tool. Our clients have enjoyed the greatest success when our employee education consultants work with our retirement plan advisers to build annual education campaigns that incorporate the diverse needs of their employees. A little bit of planning goes a long way in improving participation, engagement, deferral rates, and other important metrics.

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4. Focus on Holistic Financial Wellness

Last year, inflation and the threat of a looming recession were top of mind for many Americans. Three statistics from a recent PNC survey of corporations and their employees emphasize this:

  1. Seven in ten employees reported feeling financial pressure that negatively impacted their work.
  2. Three of four employers reported that employees’ financial stress affected operations, leading to reduced productivity, lower morale, and decreased performance.
  3. Nearly one in four (23%) survey participants spoke with a financial adviser in the previous three years.

Plan sponsors can help employees with their financial well-being by making their retirement plans more than just a vehicle for saving. A nuanced emphasis on financial wellness can not only improve employee financial health but also foster greater productivity and talent retention. Providing access to group education sessions during the workday, encouraging the use of calculators and other online recordkeeper tools, and facilitating individual consultations with financial educators are all helpful steps.

5. Evaluate Your Recordkeeper

The recordkeeper industry is rapidly consolidating while struggling to keep up with a highly active regulatory environment. While some recordkeepers are meeting the challenge, others are falling behind. As part of their fiduciary duty, plan sponsors must regularly evaluate providers on two key dimensions:

  1. Services and Products. Plan sponsors analyze the services rendered to determine if they need improvement. For a recordkeeper’s participant website, among other products, plan sponsors might survey participants or even personally test the experience. They should document these findings as part of review meetings at least every year and save them in a fiduciary file for future reference.
  2. Fees. A good fee evaluation process compares what a plan charges relative to other plans of similar size in assets and participants that provide similar services to a similar number of people. We engage an independent fee benchmarking service to provide this information to our clients that they can then save in their fiduciary file.

If recordkeeping relationships are not meeting their standards, plan sponsors should explore whether other providers are better fits.

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6. Defend Cyber Security

As the number and sophistication of cyberattacks increase, organizations are educating themselves on how best to protect themselves against fraud. Last year, 88.2% of DC plans initiated cyber security actions. Plan sponsors and participants need to stay up to date on the DOL’s cyber security guidance. For plan sponsors, the DOL’s “Cybersecurity Program Best Practices” is a helpful starting point.

The DOL guidance highlights plan data as a central concern. We recommend plan sponsors evaluate their internal best practices as well as those of recordkeepers and other plan vendors.

Plan sponsors should consider asking their providers every year for information about their cybersecurity practices. Reviewing and documenting that data and storing it in a fiduciary file is a simple best practice to implement. Plan sponsors might take it one step further and work with their recordkeeper to distribute participant-focused communications to improve digital hygiene. In our experience, calls to improve cybersecurity practices have an added benefit: They encourage plan participants to log in to their accounts and engage with their retirement plans.

7. Governance and Compliance Refocus

The SECURE 2.0 Act of 2022 received detailed coverage in 2023 and drew considerable attention and bandwidth throughout the year — sometimes at the expense of other projects and best practices. Plan sponsors may have postponed evaluating the recordkeeping landscape, conducting a TDF review, or analyzing plan design relative to competitors, among other projects.

The good news is that getting back on track is easy. Plan sponsors should establish their objectives and set deadlines to ensure they are taking steps to meet them. We recommend plan sponsors build a 2024 checklist with their adviser and get to work on checking off the boxes as soon as possible.

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Plan sponsors serve a critical role in managing retirement programs in a way that helps create positive retirement outcomes for plan participants.

By keeping these seven priorities front of mind, plan sponsors can focus their efforts where they have the potential to do the most good.

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All posts are the opinion of the author(s). As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

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About the Author(s)
Christopher M. Dall, CFA

Christopher M. Dall, CFA, is managing director, Defined Contribution Retirement Solutions, for PNC Institutional Asset Management® (PNC IAM). In this role, he leads PNC IAM’s efforts to provide 3(21) investment advisory, 3(38) investment management, financial wellness, and employee education services for defined contribution plans. He provides functional oversight to the Retirement Plan Advisors and Employee Education Consultants who are responsible for providing defined contribution solutions to plan sponsors. Dall joined PNC in 2015 as an associate investment advisor. Most recently, he served as content manager, working closely with the IAM business and marketing teams to create thought leadership and other content for the Outsourced Chief Investment Officer (OCIO) and DC Retirement Solutions Groups. In addition, he has authored content featured on the CFA Institute Enterprising Investor blog and SHRM's blog, in addition to being quoted in industry news sources such as He has also presented on related topics at various industry conferences and local market events. Dall is a director on the Leadership Committee of Plan Sponsor Council of America (PSCA) and the chair of PSCA's Thought Leadership Council. He is an active member of the PNC IAM Diversity, Equity, and Inclusion Working Group and has served as the vice president of the Interfaith Employee Business Relations Group. Dall graduated with a bachelor's of science in finance from Penn State Erie, The Behrend College. He holds the chartered financial analyst® (CFA) designation. He also studied at Oxford College and Emory University.

Deana Harmon

Deana Harmon is the investment director for PNC Institutional Asset Management® responsible for leading the advisory services offering for defined-contribution plans. In her role, she is actively involved with the rollout and continued delivery of fiduciary investment services for existing and new clients. In addition, as an investment thought leader, Harmon heads the group’s investment insight and communications with clients, the media, and industry leaders. Prior to her current role, she was chief investment officer and retirement plan adviser for a registered investment advisor firm serving only retirement plans. There she provided leadership and advice to clients. Before that position, she was a senior relationship manager at a regional broker/dealer and registered investment advisor, where she was responsible for investment reviews and retirement plan advisory services. Harmon was acknowledged for her contributions to the retirement industry by being awarded NAPA Top Woman Advisors accolade in 2018, 2017 and 2015. She is also a member of the Investment Committee for the Plan Sponsor Council of America. Harmon graduated with a bachelor's of science from Ball State University and with a master's of business administration from Butler University. She holds the Certified Investment Management Analyst and Accredited Investment Fiduciary® (AIF) designations.

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