Voya Investment Management (Voya IM), the asset management business of Voya Financial, Inc. (NYSE: VOYA), today released new findings from its fourth edition of its survey of retirement plan sponsors, defined contribution (DC) specialists and contributing retirement plan participants detailing retirement perspectives on issues such as retirement readiness, investing and overall financial confidence.

This year, Voya IM surveyed plan participants for the first time, and their responses show just how much plan sponsors overestimate participant retirement readiness. Among many findings, the research found a gap between participant feelings versus plan sponsor perceptions when it comes to retirement readiness, where a strong majority (87%) of plan sponsors say their participants are somewhat or very prepared for retirement while only 63% of participants feel the same way.

As in 2021, sponsors’ top concerns remained to ensure that their plans comply with new regulations and that their participants are properly invested. Reducing plan fees and expenses has also been a recurrent focus that has grown in significance since 2021, moving from fifth place in the previous survey to third place this year. Cybersecurity is also a key concern for plan sponsors.

Turning to the impact of markets, more than half of the participants surveyed reported that inflation and the state of the economy will have a severe or major impact on their ability to save for retirement, while COVID-19 was much less frequently cited as an obstacle to retirement savings. 37% of participants over age 50 said that they are now planning to retire later than originally hoped due to the long-term effects of market volatility, inflation and COVID. When sponsors were asked for their views on the top long-term combined effects of recent market volatility, rising inflation and COVID on retirement plans and employee benefits, they cited an increase in participant investment changes and higher demand for emergency savings benefits as top impacts.

“Inflation and continued market fluctuations remain a concern for many Americans particularly for those nearing retirement. As a result, it’s become clear there is a disconnect between employers and their employees surrounding retirement readiness,” said Brian Houston, SVP, Business Development Manager, DCIO, Voya IM. “Specialists and employers can consider these findings an opportunity to bring forward more retirement readiness support solutions, such as offering an expanded investment menu for workers nearing retirement that includes additional fixed income options, lower volatility equity options and other strategies, such as managed accounts, to help employees on their path for a more secure financial future.”

Voya IM’s research also revealed that retirement preparedness has a direct impact on an individual’s overall financial confidence. Voya’s research uncovered an opportunity for plan sponsors and specialists to offer more education and solutions when it comes to generating income and becoming prepared in retirement.

This is relevant as nearly 90% of participants said they are somewhat or very interested in retirement income solutions and an investment option which helps provide income during retirement (87%) and help to understand how to generate income in retirement so that they can maintain their current lifestyle (87%).

An opportunity exists for specialists and sponsors to boost guidance and education to improve outcomes

Participants’ interest in several products and services (including support for transition to retirement, auto features and support for caregivers) indicates that there is demand for additional decision support for retirement planning, and is also an opportunity for sponsors and specialists to adopt and promote these services within their retirement plan features to help drive greater financial outcomes for participants. This is proven even more important for the role of the employer as a majority (82%) of participants trust the retirement planning services offered to them by their employer and are confident that the retirement plan offered through their employer will help them achieve their retirement goals. In addition, 87% are also more likely to stay with their employer if they offer competitive retirement planning services and products.

About the survey:

From mid-February to early March 2023, Voya IM repeated its online survey of retirement plan sponsors to take the temperature of the retirement landscape. The survey sought feedback on a range of concerns such as plan support, investments, participant support, regulatory and compliance issues and plan costs and fees. Previous waves of the survey were conducted in March 2021, December 2018 and April 2016. The survey was expanded in 2023 to include contributing participants for the first time to better understand their perspectives on issues such as retirement readiness, investing, and financial confidence.

The survey includes feedback from 304 plan sponsors, 205 plan specialists and an online survey conducted among 500 benefits-eligible, employed Americans who are actively contributing to their employer-sponsored retirement plan.

Certain exhibits distinguish plan sponsor segments by size of plan. The study divided sponsors into three segments: plans with $1 million to less than $5 million, plans with $5 million to less than $25 million and plans with more than $25 million. Details on the definitions and methodologies of the study can be found in the Appendix. Some exhibits may not sum due to rounding.

About Voya Investment Management

Voya Investment Management manages approximately $312 billion as of September 30, 2023 in assets across public and private fixed income, equities, multi-asset solutions and alternative strategies for institutions, financial intermediaries and individual investors, drawing on a 50-year legacy of active investing and the expertise of 300+ investment professionals. Named a Best Place to Work in Money Management by Pensions & Investments for eight consecutive years, Voya IM has cultivated a culture grounded in a commitment to understanding and anticipating clients’ needs, producing strong investment performance, and embedding diversity, equity and inclusion in its business.

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