Sponsors Expect Automated Services

When shopping for a new retirement plan provider, plan sponsors take a close look at providers’ ability to deliver a host of administrative services online.

Electronic Funds Transfer for Deposits

Nonexistent in the defined-contribution market just five years ago, automated plan administration functions, such as electronic payroll submission, electronic funds transfer and data downloads, are rapidly becoming must-have capabilities for plan sponsors of all sizes. In fact, automated functions now comprise six of the 10 services that sponsors consider most important in their selection of plan providers.

New research by Spectrem Group confirms the trend. For instance, 70% of plan sponsors now regard electronic funds transfer of deposits as either very important or necessary, matching the percentage of sponsors that feel that way about provider-led participant education meetings, long a key criterion for sponsors in evaluating plan providers.

Electronic funds transfer of deposits appeals most to the largest plan sponsors, with nine out of 10 saying it is very important or necessary for their providers to offer them that capability. The appeal of that particular function declines with plan size. However, even among the smallest plan sponsors, two-thirds consider it either very important or necessary.

Sponsors are looking for other automated functions, as well. More than half say it is either very important or necessary for their providers to offer electronic submission of payroll and deposit information (68%), on-demand account statements (66%), electronic submission of compliance testing information (63%), forms and educational material downloads and sponsor-defined data downloads (58%).

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