Only 45 percent of plan sponsors feel their plan provider has been accountable in following through on promises, according to the National Association of Retirement Plan Participants.
Plan sponsors’ general impression of financial institutions is pretty bleak. Only one in 11 say they can “always trust financial institutions to do the right thing for plan sponsors and participants.”
Trust levels improved quite a bit when sponsors were asked specifically about their relationship with their plan provider. Two-thirds (65 percent) say they can “always” trust their provider to do what is right. The study found “trust ratings” to widely vary, with the highest rating being 86 percent, and the lowest 40 percent.
The NARPP study, which was developed in partnership with Stanford University, was billed as the first to examine the question of trust in the plan sponsor-provider relationship.
More than 800 sponsors were surveyed, with average plan assets of $90.5 million. The top three trust rankings of providers were T. Rowe Price, Vanguard, and Principal Financial, according to the study.
“Trustworthiness” ranked as the most influential factor in how sponsors select a plan provider, scoring higher than metrics such as participant customer service, quality of the customer experience, technology, education, administrative service and pricing.
The study identified several core issues that erode trust, including accountability, incidence of problems, and the capacity of providers to understand the needs and values of the businesses they serve. NARPP is a San Francisco-based nonprofit that advocate for individual savers.