In recent years, retirement plan record keepers have been forced to sit on the sidelines while most financial services firms reaped the business benefits of full-blown digital rejuvenation efforts. Record keepers simply had no funding for these investments. Over the last five to six years, retirement recordkeeping organizations have been increasingly constrained by inflexible legacy technology platforms and the need to continually cut cost per participant (CPP) as fee revenue decreases.
Meanwhile, the pace of regulatory changes (such as the SECURE Act and the CARES Act) has accelerated, driving the need for greater operational flexibility. Record keepers are challenged to provide holistic advice and self-service capabilities to plan participants, as well as offering plan sponsors capabilities such as seamless approvals, processing of participant files for plan onboarding, eligibility checks, contribution assessments and other data needs. Without digital technologies to enable flexible and cost-effective new capabilities, record keepers risk losing business. Something has to give.
Record keepers need digital technology to help them balance these imperatives while holding down CPP. The good news: CPP can be brought down significantly at the same time record keepers enable the improved capabilities plan sponsors and participants expect. The choice is not and should not be one vs. the other.
Six Engagements that Delivered Lower Cost While Driving Business Goals
Retirement providers do not have to forgo the benefits brought by digital due to cost considerations. It is possible to optimize both sides of this equation, if you tackle one area at a time.
Small changes add up to big benefits, as results from six of our recent client engagements reveal.