Retirement Insights
2023 Defined Contribution Plan Sponsor Survey Findings
Continued progress
through partnership
Expanding the trend of doing more
for participants
Retirement Insights
2
2023 Defined Contribution Plan Sponsor Survey Findings
Our fifth Defined Contribution (DC) Plan Sponsor
Survey oers insights into how plans have
navigated the remarkable past four years. The
period began with the COVID-19 pandemic;
subsequently moved through the Great
Resignation, rapidly rising inflation and elevated
market volatility; and then saw the passage of the
SECURE 2.0 Act. Plan sponsors appear to have
emerged with an ever-expanding focus on how to
help position participants for greater retirement
funding success.
3
2023 Defined Contribution Plan Sponsor Survey Findings
Table of contents
4 Overview and Methodology
5 Part One : Employee financial wellness
9 Part Two: DC plan design
17 Part Three : Plan investments
21 Part Four: Retirement income
23 Conclusion
4
2023 Defined Contribution Plan Sponsor Survey Findings
Overview
This report marks an important milestone. We conducted our first survey in 2013 and now have a decade of data
tracking the evolution of DC plan sponsors’ views and actions around their retirement platforms. The history of DC
plans has been one of continual advancements, representing a unique partnership between plan sponsors and
participants. Participants must do their part, of course, but plan sponsors play a critical role in this process. Their
decisions and actions have been shown to have a tremendous impact on participants’ outcome potential, and this
recognition has been reflected in the progression of responses over time.
This year’s results show that many sponsors continue to build and expand on their eorts to help their participants
achieve retirement security. We present these findings in four parts, covering how plan sponsors are approaching
employee financial wellness, plan design, plan investments and—an area of increasing focus—retirement income.
Methodology and respondent profile
From January 9 through February 28, 2023, we partnered with Greenwald Research, a market research firm based
in Washington, D.C., to conduct an online survey of 788 plan sponsors. All respondents are key decision-makers for
their organizations’ DC plans. All organizations represented have been in business for at least three years and oer a
401(k) or 403(b) plan to their domestic U.S. employees.
Below are breakdowns of our sample of plan sponsors, both by plan assets and by their organizational role. Results
aggregated across plan size categories were weighted to reflect the size distribution of plans in the U.S. DC universe.
Plan size (AUM) Number of respondents
Less than $1 million 155
$1 million to just under $10 million 198
$10 million to just under $50 million 157
$50 million to just under $250 million 125
$250 million to just under $1 billion 93
153
$1 billion or more 60
Total 788
42%
Human
resources
15%
Financial
Organizational
role
42%
C-Suite
Source: J.P. Morgan Plan Sponsor Research 2023. Organizational role definitions: “C-Suite” is owner/partner, chairman, president, CEO, executive
director or other general senior management position; “human resources” is human resources or employee benefits; “financial” is CFO,
chief investment officer or other financial, investment or treasury position.
Respondent composition by plan assets Respondent composition by organizational role
(% of total)
Participants’ perspectives
Throughout these findings, we highlight how plan sponsors’ responses align with participants’ views about their retirement
plans and what they want from employers, based on our related DC Plan Participant Survey research, which was last conducted
in 2021. There were 1,281 respondents in the online survey.
5
2023 Defined Contribution Plan Sponsor Survey Findings
Part One: Employee financial wellness
Key takeaways
1. The vast majority feel a sense of responsibility for employees’ financial wellness.
2. DC plans and health insurance are the most frequently oered benefits, but employers, particularly larger ones,
are expanding into other areas of financial and personal wellness.
3. Most oer or are considering oering a financial wellness program.
1. The vast majority feel a sense of responsibility for employees’
financial wellness
Employers’ sense of duty regarding employees’ financial wellness continues
to grow. Nearly nine out of 10 surveyed sponsors report feeling a “very high” or
“somewhat high” level of responsibility, up from 74% in 2019 and 59% 10 years
ago, when we conducted our first survey (Exhibit 1).
PARTICIPANT PERSPECTIVE
Nearly 7 of 10
surveyed participants believe
that their employers have a
responsibility to help with
employees’ financial wellness.
1
Very little Some Somewhat high Very high
41%
59%
26%
74%
14%
85%
0
20
40
60
80
100%
2013 2019 2023
A full 85% of plan sponsors feel a strong sense of responsibility for employee financial wellness, up from 59% in 2013
Exhibit 1: As an employer, what level of responsibility do you feel for your employees’ overall financial wellness?
Note: 2013 total n=396; 2019 total n=838; 2023 total n=788.
Source: J.P. Morgan Plan Sponsor Research 2023.
1
J.P. Morgan Plan Participant Research 2021.
6
2023 Defined Contribution Plan Sponsor Survey Findings
2. DC plans and health insurance are the most frequently oered benefits, but employers,
particularly larger ones, are expanding into other areas of financial and personal wellness
All respondents oer a DC plan, of course, since that
was a requirement to participate in the survey. Almost
all also provide employer-sponsored health insurance.
In addition, there has been a clear expansion into
other wellness-related benefits as employers have
recognized the interconnection of overall employee
financial and personal wellness, productivity and
turnover. More
than seven out
of 10 surveyed
sponsors report
oering employees
life insurance,
six out of 10 oer
disability insurance
and mental health
benefits, half make
health savings
accounts (HSAs) available, and just under half provide
paid parental or caregiving leave (Exhibit 2). These
numbers grow even bigger for larger plan sponsors,
with more than $250 million in plan assets.
When plan sponsors are asked for the three most
important benefits for attracting and retaining
employees, health insurance (reported by 73% of
sponsors) and DC plans (68%) top the list, followed
at a notably lower level by life insurance (36%), paid
parental or caregiving leave (21%), mental health
resources (19%), health savings accounts (18%) and
disability insurance (14%). Interestingly, mental health
resources move slightly ahead of paid parental or
caregiving leave when considered in the context of the
pandemic vs. the Great Resignation.
46%
52%
59%
60%
74%
98%
100%
Paid parental or
caregiving leave
Health savings accounts
Mental health benefits/
resources
Disability insurance
Life insurance
Health insurance
DC plan
0%
20 40 60 80
100
$250M+
<$250M
Paid parental or
caregiving leave
Health savings accounts
Mental health benefits/
resources
Disability insurance
Life insurance
Health insurance
DC plan
0%
20 40 60 80
100
45%
52%
59%
59%
74%
98%
100%
65%
57%
67%
72%
84%
100%
100%
Note: total n=788; $250M+ n=153; <$250M n=635.
Source: J.P. Morgan Plan Sponsor Research 2023.
Many have expanded into overall financial and personal wellness benefits, led by larger plans
Exhibit 2: Which of the following benefits do you offer employees? (% yes)
PARTICIPANT PERSPECTIVE
Nearly 9 of 10
surveyed participants consider
retirement benefits an important
factor when deciding whether to
stay with their current employer
or consider a new opportunity.
1
1
J.P. Morgan Plan Participant Research 2021.
7
2023 Defined Contribution Plan Sponsor Survey Findings
3. Most oer or are considering oering a financial wellness program
Four out of 10 surveyed sponsors report oering a
financial wellness program beyond their retirement
and health benefits, and an additional three out of
10 are considering oering one (Exhibit 3). The most
frequently cited goals of these programs are to help
employees’ financial stability, retirement planning and
financial education.
Surveyed sponsors oering a financial wellness
program are significantly more likely to provide
income protection benefits, such as life and disability
insurance. One-quarter oer student loan debt
assistance, and around four out of 10 oer emergency
savings benefits, one-on-one financial coaching
and/or debt management assistance.
Additionally, sponsors with a financial wellness
program more often see their retirement plans as
eective in meeting key goals, compared with those
without such a
program; 95%
believe they are
helping make sure
employees have a
financially secure
retirement.
43%
Yes,
currently oering
Oer financial wellness program
28%
No, but considering
43%
oer
30%
No
Financial wellness program goals (among those who have or are considering a program)
24%
20%
17%
9%
8%
Help financial stability and security
Help employees for their retirement
and future life events
Help financial literacy and education
Employee morale
Increase enrollment and use of benefits
0% 5 10 15 20 25
Nearly three-quarters of sponsors oer or are considering oering a financial wellness program
Exhibit 3: Do you currently have a financial wellness program within your organization, separate of your retirement and health benefit offerings?
Note: total n=788; offering or considering a program n=591.
Source: J.P. Morgan Plan Sponsor Research 2023.
PARTICIPANT PERSPECTIVE
More than
9 of 10
participants feel that financial
wellness programs are an
important benefit.
1
1
J.P. Morgan Plan Participant Research 2021.
8
2023 Defined Contribution Plan Sponsor Survey Findings
Implications
Financial wellness programs can be challenging
to define, and what dierent people and dierent
organizations consider a financial wellness benefit
can vary considerably. Plan sponsors and
participants, however, are clearly thinking more about
these types of benefits and what they can mean to
both employees’ and companies’ overall fiscal health.
Indeed, the connection among overall employee
financial and personal wellness, productivity and
workforce sentiment has become even more apparent
through recent workplace trends, such as the Great
Resignation, “quiet quitting” and the struggle to
find talent.
Research also has shown a strong link between
participants’ retirement outcomes and their overall
financial well-being. In our own related data,
participants with financial stress, such as spending
spikes they cannot absorb through income or
immediate savings, generally have lower retirement
balances and worse retirement outcomes. These
participants tend to be poorly equipped to deal
with spending volatility, often tapping into their DC
balances, which can leave them with less money at
retirement. The reality is that it is all inherently linked.
With SECURE 2.0, the regulatory environment is
evolving, making it easier for plan sponsors to oer
emergency savings and debt management programs,
for example. Still, nearly 60% of plan sponsors are not
currently oering a financial wellness program. Looking
ahead, we expect a steadily growing number of plan
sponsors to continue evolving these types of oerings,
just as we have seen advancement and innovation in
other areas of retirement benefits design.
9
2023 Defined Contribution Plan Sponsor Survey Findings
Part Two: DC plan design
Key takeaways
1. More plan sponsors are taking a proactive approach in driving participant outcomes.
2. Many are taking an active role around contributions, with automatic features continuing to gain momentum and
employer matches becoming more generous.
3. Most see their plan communications as eective, with more moving toward customization.
4. Most work with a financial professional and are generally satisfied with the services, though clear opportunities exist.
1. More plan sponsors are taking a proactive approach in driving participant outcomes
A fundamental dierence in plan design is how sponsors approach participant decision-making. At a high level,
there are two main philosophies:
• Participant driven: These sponsors believe participants should primarily make their own plan choices, including
whether to participate, how much to contribute and how to invest.
• Proactive plan design: These sponsors believe in taking a more active approach to help better position
participants for retirement funding success through programs that make it easy to tap into the benefits of the
plan, such as automatic enrollment and contribution escalation, personalized communications, and investment
defaults into target date funds (TDFs) and other professionally managed asset allocation strategies.
Through the years, there has been a clear trend toward being more proactive in plan design, as sponsors have
become increasingly comfortable with these types of advancements. These programs also have been shown to
work extremely well in helping to drive stronger participant outcomes. In this year’s survey, 61% of respondents now
apply a more proactive plan design philosophy—an almost 50% increase from 2019’s 41% (Exhibit 4). In 2013, that
figure was only 24%, though the question was poised as a five-point scale vs. the current four-point scale, so it is not
an exact apples-to-apples comparison.
4321
Proactive plan design
You proactively place
participants on a strong
saving and investing path
Participant-driven
You focus on
participants making
their own choices
23% 35% 31% 10%
2019
10% 29% 41% 20%
2023
More than 60% of respondents take a more proactive plan design approach to help drive stronger participant
outcomes
Exhibit 4: On a four-point scale, which of the following comes closest to your organization’s philosophy on driving participant decisions?
Note: total n=788; proactive n=503; participant-driven n=285.
Source: J.P. Morgan Plan Sponsor Research 2023.
10
2023 Defined Contribution Plan Sponsor Survey Findings
Additionally, sponsors with a more proactive plan design
philosophy are more likely to see their plans as successful across
a broad range of goals, from employee recruitment and retention
to helping ensure participants’ retirement financial security
(Exhibit 5).
A higher number of plan sponsors with a more proactive plan design philosophy view their plans as “extremely
eective” or “very eective”
Exhibit 5: In your opinion, how effective has your plan been in meeting the following goals? (Combined “extremely effective” and “very effective”
responses)
Note: total n=788; proactive n=503; participant-driven n=285.
Source: J.P. Morgan Plan Sponsor Research 2023.
More proactive plan design philosophy Primarily participant-driven philosophy
88%
75%
Demonstrates our
level of caring about
our employees
89%
69%
Promotes better appreciation
of their overall
compensation package
90%
68%
Helps make sure
employees have a
financially secure retirement
89%
77%
Helps in retaining
quality employees
85%
73%
Helps in recruiting
quality employees
2. Many are taking an active role around contributions, with automatic features continuing to
gain momentum and employer matches becoming more generous
Automatic enrollment and automatic contribution
escalation programs have been shown to be highly
eective in increasing plan participation rates and
helping participants gradually step up saving rates
to more appropriate levels than many might have
elected on their own. This year’s survey results show
that sponsors continue to expand the adoption of these
types of programs for a growing number of participants.
Also, a plan favorite—employer matches—remains
extremely popular, with many sponsors expanding this
benefit over the past three years.
Automatic enrollment: In this year’s survey, 52% of
respondents say they oer automatic enrollment,
significantly up from 10 years ago (Exhibit 6).
• 15% automatically enroll new hires and periodically
automatically enroll employees not participating in
the plan.
• 22% automatically enroll new hires and have
conducted a one-time sweep for employees not
participating in the plan.
• 14% automatically enroll only new hires.
Starting enrollment contribution default percentages
range from less than 2% to more than 7%, with the
majority—63%—falling between 3% and 5%.
PARTICIPANT PERSPECTIVE
Sponsors’ proactive eorts seem to be largely
welcomed by many employees—
62% of surveyed participants wish they could
just push an easy button and completely hand
over retirement planning.
1
1
J.P. Morgan Plan Participant Research 2021.
11
2023 Defined Contribution Plan Sponsor Survey Findings
More than half of plan sponsors oer automatic enrollment for new hires, with a sizable portion also sweeping
nonparticipating employees into the plan
Exhibit 6: What method of automatic enrollment, if any, does your plan offer?
Note: total n=788; offer automatic contribution escalation n=344.
Source: J.P. Morgan Plan Sponsor Research 2023. Totals may not equal 100% due to rounding. 1% responded “don’t know.”
Note: total n=788; offer automatic enrollment n=432.
Source: J.P. Morgan Plan Sponsor Research 2023. Totals may not equal 100% due to rounding. 3% responded “don’t know.”
The number of plans oering automatic contribution escalation has notably grown
Exhibit 7: What method of automatic contribution escalation, if any, does your plan offer?
Automatic contribution escalation: There also has
been an increase in the number of plans that oer
automatic contribution escalation, with 42.6% of
surveyed sponsors reporting this feature, just over
double 2013’s 21% (Exhibit 7). This trend has been led
by larger plans, with 60% of plans with $250 million or
more in assets under management oering automatic
contribution escalation, compared with 42% of plans
with less than $250 million in assets.
• 20% automatically escalate contributions for new
hires and have conducted a one-time sweep of
all employees.
• 14% do so for new hires and periodically conduct
sweeps for participants who are not increasing
their contributions.
• 8% do so for new hires only.
Unfortunately, the maximum contribution levels
reached by many of these programs remain well below
industry recommendations for appropriate retirement
savings amounts. For sponsors that oer this type
of feature in their plans, 50% report a maximum
escalation rate of 5% or less.
14%
22%
15%
<2%: 5%
2%: 10%
3%: 22%
2023
default
percentage
Plans with automatic enrollment
4%: 21%
5%: 21%
6%: 9%
≥7%: 9%
43%
52%
0
10
20
30
40
50
60%
2013
2023
1%
21%
increase
Auto-enroll new hires and one-time
sweep for non-participating employees
Auto-enroll new hires
Other
Total
oering
Auto-enroll new hires and periodically
non-participating employees
≤4%: 25%
5%: 26%
6%: 14%
2023
maximum
percentage
Plans with automatic contribution escalation
7%: 9%
8%: 4%
9%: 2%
10%: 12%
≥11%: 5%
Up to IRS limit: 1%
8%
14%
20%
21%
43%
0
10
20
30
40
50%
2013 2023
Ongoing new hires and one-time
employee sweep at implementation
Other method
1%
105%
increase
Ongoing new hires only
Ongoing for new hires and periodic sweeps
of employees not increasing contributions
Total
oering
12
2023 Defined Contribution Plan Sponsor Survey Findings
Adoption reluctance: Still, 47% of surveyed sponsors
continue to choose not to oer automatic enrollment
in their plans, and 51% do not oer automatic
contribution escalation. The top reasons for these
decisions, representing 78% of responses, are:
• 23% feel one contribution rate is not right
for everyone.
• 14% feel it may lead some people to save less
than they should.
• 16% feel employees are responsible for saving
on their own.
• 13% feel they would get too much employee
pushback.
• 12% do not want to incur the costs.
Unsurprisingly, sponsors with a more proactive
plan design philosophy are more likely to oer both
automatic enrollment (56% vs. 46%) and automatic
contribution escalation (51% vs. 29%) features than
plans with a primarily participant-driven philosophy.
Employer contributions: By far, one of the most
frequently utilized plan features is an employer
contribution/match. Nine out of 10 surveyed
sponsors report oering this type of benefit. Further,
more than half have added or enhanced their
employer contributions/matches in the past three
years, and a quarter have added or enhanced their
immediate vesting schedules. This trend is even more
pronounced for sponsors with a more proactive plan
design philosophy, 65% of which added or enhanced
their employer contributions/matches, significantly
higher than the 35% of sponsors with a primarily
participant-driven philosophy that did so.
PARTICIPANT PERSPECTIVE
Although some plan sponsors
may fear pushback,
75%
of
surveyed participants want help
determining how much to save in
their plans, and almost
90%
have favorable or neutral views
about automatic enrollment
and automatic contribution
escalation programs.
1
1
J.P. Morgan Plan Participant Research 2021.
13
2023 Defined Contribution Plan Sponsor Survey Findings
3. Most see their plan communications as eective, with more moving toward customization
The majority of surveyed sponsors believe their
communication eorts are having a positive
impact. Nearly eight out of 10 are confident their
communications are helping increase plan
participation, contribution rates and the percentage
of participants making appropriate investment
decisions, significantly higher than 2019’s 44%–45%.
Additionally, fewer sponsors are relying on general
participant communications, and more are providing
more targeted and personalized messaging (Exhibit 8),
a trend likely driven by advancements in technology.
• 45% provide only general communications to
participants, markedly down from 57% in 2019.
• 40% provide education on specific topics they are
trying to drive action on, up from 32% in 2019.
• 49% target communications based on the
participant segment, up from 25% in 2019.
• 32% provide personalized communications at the
individual level, up from 23% in 2019.
Sponsors with a more proactive plan design philosophy
tend to be more frequent adopters of customized
communications, but even sponsors with a primarily
participant-driven philosophy are tapping into this type
of innovation, albeit at more subdued levels.
More sponsors, particularly those with a more proactive plan design philosophy, are using customized
communications
Exhibit 8: Which of the following best describes your plan’s approach to participant communications?
We provide general
communications to our
participant base
More generic More personalized
We provide education on
specific topics where we are
trying to drive action
We provide targeted
communications based on
participant segments
We provide personalized
communications at the
individual participant level
45%
40%
49%
32%
57%
32%
25%
23%
2023 2019
Communications
Note: 2023 total n=788; 2019 total n=838.
Source: J.P. Morgan Plan Sponsor Research 2023.
14
2023 Defined Contribution Plan Sponsor Survey Findings
4. Most work with a financial professional and are generally satisfied with the services, though
clear opportunities exist
In this year’s survey, 76% of sponsors report working
with financial professionals, up from 71% in 2019
(Exhibit 9). Of those, 84% express a high level of
satisfaction with the relationships, sharply up from 67%
in 2019. Yet only 27% say they are “extremely satisfied.”
Do you use a financial advisor, plan advisor or consultant
on your defined contribution plan?
2023
2023
76%
use an
advisor
2019
2019
71%
use an
advisor
How satisfied are you with your primary advisor/consultant,
taking into account the cost of his or her services?
83%
68%
27%
24%
56%
44%
Extremely satisfied Very satisfied
Three out of four sponsors work with financial professionals, with generally high satisfaction rates
Exhibit 9: Do you use a financial advisor, plan advisor or consultant on your plan? If so, how satisfied are you, taking into account the cost of
the services?
Note: 2023 total n=788; 2019 total n=838.
Source: J.P. Morgan Plan Sponsor Research 2023.
15
2023 Defined Contribution Plan Sponsor Survey Findings
Most sponsors say their financial professionals demonstrate proactive behaviors
Exhibit 10 Which of the following best describes your organization’s current relationship with the plan’s financial advisor/consultant?
Note: 2023 total n=788; 2019 total n=838.
Source: J.P. Morgan Plan Sponsor Research 2023.
2023 2019
29%
28%
21%
17%
4%
27%
23%
26%
18%
6%
Our financial advisor/
consultant proactively
suggests new ideas and
shares best practices to
evolve plan
Our financial advisor/
consultant keeps us
apprised of regulatory
and other issues that may
require changes to the plan
Our financial
advisor/consultant
routinely checks in to see
if we need anything
Our financial advisor/
consultant is mostly
reactive to questions we
have regarding our plan
We rarely communicate
with our financial
advisor/consultant
The increased recognized value of financial
professionals is unsurprising, given the roller-coaster
markets and notable regulatory changes that have
taken place over the past several years. Additionally,
almost 80% of surveyed sponsors working with
financial professionals note some degree of proactive
interaction (Exhibit 10; respondents could select one
of the following that best describes their financial
professionals’ behaviors):
• 29% say their financial professionals proactively
suggest new ideas and share best practices to
evolve their plans.
• 28% say their financial professionals keep them
apprised of regulatory and other issues that may
require changes to their plans.
• 21% say their financial professionals routinely check
in to see if they need anything.
Still, about one out of five sponsors working with
financial professionals describe the relationships
as mostly reactive or with little communication. In a
related question, sponsors who work with financial
professionals they consider to be proactive are more
likely to be “extremely satisfied” or “very satisfied” with
the relationship: 95% vs. 79% of plan sponsors with
financial professionals who do not oer these types
of insights.
16
2023 Defined Contribution Plan Sponsor Survey Findings
Implications
The number of sponsors taking a more proactive
approach to plan design continues to grow. However,
there are opportunities to continue to expand adoption
of these types of programs and help drive stronger
outcomes for as many participants as possible.
If they are not already, plan sponsors may want to:
• Consider the benefits of implementing automatic
features to expand plan participation rates.
• Work with a financial professional to help determine
the most appropriate automatic contribution
rates and escalation caps for a plan’s participant
demographic base (SECURE 2.0 mandates that new
plans escalate to 10%).
• Take advantage of technological advancements to
personalize communications.
Additionally, financial professionals can help by
proactively communicating best practices to help
ensure their plan sponsor clients are well positioned
for success.
Taking a more proactive approach has been shown
to oer a strong win-win for participants and plan
sponsors alike, helping to strengthen outcome
potential as well as notably increase overall plan
satisfaction levels.
17
2023 Defined Contribution Plan Sponsor Survey Findings
Part Three: Plan investments
Key takeaways
1. Many have made changes to their investment menus.
2. Almost half do not realize they are a plan fiduciary.
3. Performance and fees continue to drive investment selection.
4. Target date fund usage remains high, and sponsors are confident in their understanding of these strategies.
1. Many have made changes to their investment menus
The most frequently reported investment menu changes were “adding an option designed to generate retirement
income for retirees” (45%), “adding a new type of fund/asset class” (37%), and “reducing the number of investment
options” (35%). Around one-quarter have changed their plan TDF suite and/or their qualified default investment
alternative (QDIA) (Exhibit 11). Interestingly, larger plans are more likely to have streamlined their investment menus
than smaller plans: 55% to 34%.
More than two-thirds have either added to or reduced the number of fund options
Exhibit 11: Have you made any of the following changes to your plan’s investment menu in the past 3 years? (% yes)
Note: 2023 total n=788.
Source: J.P. Morgan Plan Sponsor Research 2023.
23%
27%
34%
35%
37%
45%
Changed the QDIA/default investment option
Changed the TDF (Target Date Fund) suite
Added more options that incorporate ESG
Reduced the number of fund options
Added a new type of fund option/asset class
Added an option designed to generate
retirement income for retirees
0% 10 20 30 40 50
18
2023 Defined Contribution Plan Sponsor Survey Findings
2. Almost half do not realize they are a plan fiduciary
Only 55% of surveyed sponsors know that they are
a plan fiduciary, even though all the respondents
have fiduciary responsibilities. Of those that correctly
identified themselves as fiduciaries, the top fiduciary
concerns are:
• Whether we are getting the best value for the fees
that the plan and participants are paying (33%)
• That I am making prudent decisions (21%)
• Keeping up with changes in the rules that apply to
our plan (19%)
Clearly, the DC industry needs to do more educational
work in this arena. It is critical that sponsors
understand and are prudently performing their roles
as plan fiduciaries. Lack of awareness is not a defense
against liability. While sponsors may be able to engage
service providers that can share this responsibility
and help reduce their liability exposure, they are never
completely free from it, since even selecting the service
providers requires them to act in a fiduciary capacity.
3. Performance and fees continue to drive investment selection
From a fiduciary perspective, ERISA standards
for DC plans require that investment selection
follow an informed and reasoned decision-making
process. Performance and fees came in as the top
two investment selection criteria, at 64% and 54%,
respectively (Exhibit 12).
Retirement income generation also ranked relatively
high among selection criteria (41%). While adoption
of these types of strategies has remained low, it is
unsurprising that the topic made the list, given the
amount of participants who lack access to pension
benefits continues to increase and the amount of
industry attention to the matter. (See the next section
for more insights into how sponsors are navigating
the issue.)
Also of note in this year’s findings is the relatively low
percentage of surveyed sponsors—just 35%—that
report using the recommendations of their retirement
plan advisors in their selection criteria. This may
represent an opportunity for financial professionals
to play a bigger role in helping plan sponsor clients
fulfill their fiduciary duties, beyond examining
performance and fees, to help make appropriate
decisions for their plans.
The majority of sponsors focus on performance and fees to make investment selections
Exhibit 12: What criteria do you and your retirement plan investment committee consider when selecting investment options for the plan?
(Select all that apply)
Source: J.P. Morgan Plan Sponsor Research 2023.
0%
2%
16%
35%
37%
39%
41%
41%
54%
64%
Other
None of these
ESG factors
Recommendation from your retirement plan advisor
Appropriateness for targeted age groups of employees
Simplicity
Actively managed funds vs. passive index funds
Options designed to help participants generate income
in retirement
Fees
Investment performance
0% 10 20 30 40 50 60 70
19
2023 Defined Contribution Plan Sponsor Survey Findings
4. Target date fund usage remains high, and sponsors are confident in their understanding of
these strategies
The appeal of TDFs’ easy-to-access, age-appropriate
asset allocation benefits remains strong for many
sponsors. This year, 61% report their plans oer a
TDF series, nearly unchanged from 62% in 2019 and
markedly higher than the 46% in 2013 (Exhibit 13).
Larger plans continue to lead the way in providing
participants with a TDF investment option, at 73% vs.
60% of smaller plans. Further, surveyed sponsors
oering a QDIA as part of their plan mostly use a TDF to
fill that role (76%).
2023
61%
oer a
TDF
2019
62%
oer a
TDF
2013
46%
oer a
TDF
Most plans oer a TDF
Exhibit 13: Total plans with a TDF
Note: 2023 total n=788; 2019 total n=838; 2013 total n=796.
Source: J.P. Morgan Plan Sponsor Research 2023.
A potentially related finding indicates that TDFs appear
to be working well for plans. Three out of four surveyed
sponsors report feeling “extremely confident” or “very
confident” that their participants have an appropriate
asset allocation, led by proactive sponsors, at 85% vs.
59% for sponsors
with a participant-
driven philosophy.
This high degree
of confidence
is significantly
up from the only
33% of sponsors
reporting the same
level of confidence
from 10 years
ago, and it is likely
due to the broad
adoption of TDFs and the rapidly growing amount
of contributions being directed to these vehicles.
The increasing popularity of reenrollment may also
be playing a part here: 55% of plan sponsors have
considered it, and 26% have already conducted or
plan to conduct a reenrollment in the next 18 months
(up from 7% in 2019).
For surveyed sponsors oering a TDF in their plan,
almost nine out of 10 express strong confidence
in their selection and monitoring process, up from
75% in 2019 (Exhibit 14A). Similarly, almost nine out
of 10 of those sponsors indicate they understand
the construction methodologies for the TDFs in their
plans “completely” or “reasonably well” (Exhibit 14B).
Compared with sponsors of smaller plans, larger plan
sponsors express a more complete understanding of
their TDFs: 66% vs. 28%.
PARTICIPANT PERSPECTIVE
53% of surveyed
participants want help selecting
their investment strategies and
prefer to leave most ongoing
investment decisions to
experienced professionals, with
almost nine out of 10 indicating
they find it appealing to have
access to a TDF in their plans.
1
1
J.P. Morgan Plan Participant Research 2021.
20
2023 Defined Contribution Plan Sponsor Survey Findings
Implications
Selecting the right investments for a plan is critical
for participant success. On the plus side, the
broad adoption of TDFs has been a major positive
development for plans and participants. However, it is
troubling how many of this year’s respondents are not
aware of their roles as fiduciaries.
To help strengthen their plans’ investment oerings,
sponsors may want to:
• Ensure they are following a prudent, well-
documented fiduciary process for investment
selection and monitoring.
• Look deeper than performance and fees alone to
fully understand the plan’s investment strategies,
the role they serve, the potential value they add and
how they are likely to perform through a broad range
of market conditions.
• Work with financial professionals to benefit from
their investment insights and advice.
• Stay current with new industry advancements and
investment best practices that may help better
position participants for retirement funding success.
• Consider conducting a plan reenrollment into a TDF
to help more participants take advantage of the
diversification and professional asset allocation and
glide paths offered by these strategies.
Additionally, sponsors should consider their plan
demographics in their investment selection process.
Factors such as age, wealth and general investment
sophistication can significantly aect the types
of strategies that make sense as part of a plan’s
investment menu.
30%
39%
32%
35%
48%
41%
45%
48%
43%
53%
27%
45%
75%
87%
75%
88%
75%
86%
2019
2023
2019
2023
2019
2023
0% 20 40 60 80 100
Extremely confident Very confident
An appropriate process
was followed for the
initial selection of the funds
The fund selection process
was documented
An appropriate process
is in place to monitor
the funds on an ongoing basis
55%
19%
49%
68%
85%30%
0% 20 40 60 80 100
2019
2023
Understand completely Understand reasonably well
Exhibit 14A: As it relates to the TDF offered in your plan, how
confident are you that:
Exhibit 14B: What is your level of understanding of the methodology
used to construct the TDF in your plan?
Most sponsors with TDFs in their plans feel confident about their investment oversight and understanding
Note: 2023 total n=788.
Source: J.P. Morgan Plan Sponsor Research 2023.
21
2023 Defined Contribution Plan Sponsor Survey Findings
Part Four: Retirement income
Key takeaways
1. More than half of sponsors say providing retirement income is a core purpose of their plans.
2. Most feel a degree of responsibility to help participants generate income in retirement.
3. Almost half without a current solution are considering adding retirement income options in the upcoming year.
1. More than half of sponsors say providing retirement income is a core purpose of their plans
Every day, 12,000 people turn 65 in the U.S. The number of people in this age demographic is projected to more than
double over the next several decades to top 88 million people and represent more than 20% of the population by
2050.
2
This surge in participants entering and preparing to enter retirement is driving the next evolution of innovation
in DC plans: retirement income.
Given the tremendous focus on the topic across the retirement industry, it is unsurprising that sponsors have begun
to evolve their views to see their plans not just as retirement savings accumulation vehicles but also potentially as a
way to help participants manage the decumulation of these assets once they retire. Six out of 10 surveyed sponsors
now believe DC plans should be vehicles for retirement income generation (Exhibit 15).
2. Most feel a degree of responsibility to help participants generate income in retirement
Eight out of 10 surveyed sponsors feel a “very high” or “somewhat high” level of responsibility to help participants
generate income in retirement (Exhibit 16). Additionally, nine out of 10 “strongly agree” or “somewhat agree” that it is
important to oer investments that help participants generate income in retirement.
Nearly 60% believe retirement income is at least a part
of a plan’s purpose
Exhibit 15: In your view, which of the following describes the purpose
of DC plans?
Note: 2023 total n=788.
Source: J.P. Morgan Plan Sponsor Research 2023.
Note: 2023 total n=788.
Source: J.P. Morgan Plan Sponsor Research 2023.
More than 80% feel a strong sense of responsibility to
help participants generate income in retirement
Exhibit 16: As an employer, which of the following best describes
the level of responsibility you feel for helping participants generate
income in retirement?
A vehicle to help
save/invest
for retirement
41%
A vehicle to help
generate income
in retirement
23%
Both
36%
Very high
32%
Some
15%
Very little
3%
None
1%
Somewhat high
50%
2
U.S. Census Bureau data, 2020; AARP.
22
2023 Defined Contribution Plan Sponsor Survey Findings
3. Almost half without a current solution are considering adding retirement income options in
the upcoming year
Surprisingly, 66% of surveyed sponsors say they
already oer a retirement income option. This may be
because the term “retirement income” is not yet well
defined and can run a broad gamut. Plan sponsors
that said they have an oering may be referring to
simple participant education, the allowance of partial
distributions, or common investment options like
stable value and/or balanced funds (the ending point
for many TDFs). The space is now shifting into more
deliberately designed products that help participants
decumulate their savings throughout retirement and
may incorporate various types of annuity products.
However, it is still an area where more work and
research are needed.
Of plan sponsors without a current retirement income
option, 45% say that they are “extremely likely” or “very
likely” to consider oering one in the upcoming year
(Exhibit 17). Similar to many past DC plan innovations,
this trend is being led by sponsors with a more
proactive plan design philosophy. The “extremely/
very likely” figure reported by sponsors in this group
is 59%, compared with 29% for plans with a primarily
participant-driven philosophy.
For the 22% of
surveyed sponsors
without a current
retirement income
option who are not
likely to consider
adding a solution in
the upcoming year,
these are the top
5 reasons:
• 39% want retired participants to make their
own choices.
• 27% are not aware/unfamiliar with these types of
options.
• 25% are concerned about fiduciary risk/liability.
• 21% believe their current investment menus are
sufficient to help retirees.
• 15% do not want retired participants to stay in
the plan.
This is a very familiar pattern to past areas of plan
innovation when they were first introduced. It will be
interesting to see how these attitudes evolve as new
retirement income products are developed and more
broadly adopted.
Note: total n=788; do not offer retirement income solution total n=264.
Source: J.P. Morgan Plan Sponsor Research 2023.
Many expect to actively explore retirement income
options this year
Exhibit 17: How likely are you to consider offering retirement
income options in the coming year? (Currently do not offer
retirement income solutions)
10%
35%
34%
20%
2%
Extremely
Very
Somewhat
Not too
Not at all
0% 10 20 30 40
PARTICIPANT PERSPECTIVE
85% of surveyed
participants say they would likely
leave their balances in their
plans post-retirement if there
was an option to help generate
monthly retirement income.
1
1
J.P. Morgan Plan Participant Research 2021.
23
2023 Defined Contribution Plan Sponsor Survey Findings
Implications
It is clear from this year’s research that retirement
income solutions remain the next big area of innovation
for the DC industry. The demand is there and growing
for both participants and sponsors. Consequently, we
expect this will continue to be an intense area of focus
and development for the near future.
For sponsors interested in oering retirement income
options:
• Consider a short survey to gauge and better
understand the needs of your participants.
• Research the available retirement income products
and their different features, benefits and trade-offs.
• Determine which product type best aligns with the
plan’s demographics.
• Amend current plan documents to make any
necessary changes to accommodate the selected
retirement income solution.
• Develop a robust communication program to help
employees make informed decisions.
As always, fiduciaries should consult legal and
financial professionals and document their
decision-making process.
Conclusion
At J.P. Morgan Asset Management, we remain deeply committed to supporting the continuing evolution of DC plans.
We are excited to bring you this year’s plan sponsor survey findings and are proud of the advancements that the DC
industry has accomplished through its strong sense of partnership since we began the survey 10 years ago.
Today, DC plans have become the primary retirement savings vehicle for most working Americans, and sponsors
have risen to the occasion. This is reflected in the high degree of confidence most have in their plans. In this year’s
survey results, more than seven out of 10 say they are “extremely” or “very” satisfied with their plans’ participation
rates, investment performance, TDF oerings, average contribution rates and quality of participant education.
We look forward to the next step in this innovation. Working together, we can help ensure a greater number of
participants are well positioned to achieve the safer levels of retirement security they deserve.
Retirement Insights
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