Key Takeaways
- • Morgan Stanley's latest workplace benefits survey, released Oct. 20, found that more than a third of plan sponsors now list the defined contribution (DC) plan as employees' most prized benefit, up from 15% in 2024, and 93% rank DC plans among workers' top benefits, tied with healthcare.
- • Morgan Stanley's Jeremy France argued that as 401(k) plans become more important to employees, sponsors have a greater responsibility to help workers use them effectively, with personalized guidance by career stage as the recommended approach.
- • Voya's October Financial Confidence Index found workers feel more confident creating a retirement plan than achieving long-term financial security, reflecting generational pressures from student debt, Social Security insolvency concerns and retirement anxiety.
- • Low utilization is a key concern: sponsors estimate only 12% of participants use managed accounts, and 41% of employers neither using nor considering them cite doubts that participants would use them.
- • Voya's survey of 4,000 employees found participants using workplace education tools showed better financial behaviors than people with $500,000 or more in investable assets, per Voya's Kerry Sette.
Summary
Defined contribution plans have become the central retirement benefit for many workers as traditional pension plans have declined, and employers are being urged to move beyond offering plan features toward providing broader financial wellness support. According to Morgan Stanley's latest workplace benefits survey, released Oct. 20, more than a third of plan sponsors list the DC plan as employees' most prized benefit, up from 15% in 2024. Another 93% of sponsors rank DC programs among workers' top benefits, tied with healthcare.
The push for more support comes amid persistent financial anxiety. Results from an October Voya Financial Confidence Index report showed workers feel more confident about building a retirement plan than about ultimately reaching long-term financial security. Voya's head of consumer insights and research, Kerry Sette, said younger workers, including Gen Z and Millennials, are often focused on stabilizing their lives and paying down student loans or other debt, while Gen X and working Baby Boomers face retirement with Social Security insolvency concerns in the background.
Morgan Stanley's Jeremy France, head of institutional consulting solutions, said sponsors are increasingly seeking personalized guidance that addresses employees' broader financial lives. He recommended tailoring guidance to career stage, pairing digital tools with individual conversations, and measuring whether that support influences plan outcomes. Sette cautioned that offering tools alone is insufficient, stating, "Access is great, but how do we drive engagement?" Voya's survey of 4,000 employees found participants who used workplace education tools showed better financial behaviors than people with $500,000 or more in investable assets.
Utilization remains a concern. In Morgan Stanley's research, 72% of sponsors cited utilization rates and 47% cited participant savings rates among their top three measures of plan success. Sponsors offering managed accounts estimate only 12% of participants use the service, and 41% of employers neither using nor considering them cite doubts about participant use as a leading reason. France urged plan committees to determine whether low uptake reflects a lack of interest or a lack of understanding before concluding a feature lacks value.
The push for more support comes amid persistent financial anxiety. Results from an October Voya Financial Confidence Index report showed workers feel more confident about building a retirement plan than about ultimately reaching long-term financial security. Voya's head of consumer insights and research, Kerry Sette, said younger workers, including Gen Z and Millennials, are often focused on stabilizing their lives and paying down student loans or other debt, while Gen X and working Baby Boomers face retirement with Social Security insolvency concerns in the background.
Morgan Stanley's Jeremy France, head of institutional consulting solutions, said sponsors are increasingly seeking personalized guidance that addresses employees' broader financial lives. He recommended tailoring guidance to career stage, pairing digital tools with individual conversations, and measuring whether that support influences plan outcomes. Sette cautioned that offering tools alone is insufficient, stating, "Access is great, but how do we drive engagement?" Voya's survey of 4,000 employees found participants who used workplace education tools showed better financial behaviors than people with $500,000 or more in investable assets.
Utilization remains a concern. In Morgan Stanley's research, 72% of sponsors cited utilization rates and 47% cited participant savings rates among their top three measures of plan success. Sponsors offering managed accounts estimate only 12% of participants use the service, and 41% of employers neither using nor considering them cite doubts about participant use as a leading reason. France urged plan committees to determine whether low uptake reflects a lack of interest or a lack of understanding before concluding a feature lacks value.
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