Why 91% of Employers Don’t Trust Banks to Manage Employee Retirement Plans
Trust is the No. 1 reason employers choose retirement plan providers for their employees, according to a landmark study of 809 companies across a full spectrum of industries in 2014. You’re not surprised are you?
But for the first time we learn which are the top three providers that companies trust the most, and that only 9 percent of employers trust financial institutions to manage their employees’ retirement plans.
The study, “Plan Sponsor Trust and Confidence Study,” was conducted by the National Association of Retirement Plan Participants (NARPP) with Stanford University.
The research also lists the five factors that erode trust between employers and the retirement plan providers.
“We know that employers are relying on financial institutions as partners in helping secure a financially stable future for their employees,” says NARPP Founder Laurie Rowley.
“For the first time this study provides plan sponsors with sound data and metrics on trust, confidence and accountability among leading retirement plan provider and these measures are critical when evaluating plan providers to partner with,” she adds.
Priorities — why employers pick plan providers
— Participant customer service
— Quality of the customer experience
— Administrative service
The study reveals a great deal of pessimism in about the trustworthiness of financial institutions in general, according to an NARPP press release.
Only one out of 11 employers, or 9 percent, indicate they can “always trust financial institutions to do the right thing for plan sponsors and participants,” says Ms. Rowley.
Factors that build or lead to erosion in trust of providers
— Incidence of problems in service
— Understanding of the employer’s needs
— Values the employer’s business
Sixty-five percent of plan sponsors say they can always trust their providers.
The three most-trusted plan providers
1) T. Rowe Price
3) Principal Financial
The study of employers included companies with plan assets ranging from $5 million to $250 million.
NARPP, narpp.org, is a San Francisco-based 501c3 nonprofit organization. The nonprofit says its mission is to provide transparent financial information for the 145 million working Americans saving for retirement.
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“Banks are an almost irresistible attraction for that element of our society which seeks unearned money.”
-J. Edgar Hoover
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
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