employees from white and blue collar jobs lined up behind young woman in sweater and glasses (Photo: Shutterstock)

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The coronavirus pandemic has presented a "make-or-break" momentfor retirement plan providers and a new study from J.D. Power saysthe industry has room to ramp up providing guidance toparticipants.

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J.D. Power's latest U.S. Retirement Plan ParticipantSatisfaction Study, based on responses from 10,159 retirement planparticipants in February and March, examined investor satisfactionbased on six factors. Those factors include engagement on live andonline channels; investment and service offerings; and fees andexpenses.

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"The COVID-19 pandemic struck the U.S. right in the middle ofthe fielding period for this study, and it is crystal clear in ourdata that, as market turmoil increased, investor sentiment andeconomic outlook declined sharply," Mike Foy, senior director ofwealth management intelligence at J.D. Power, said in a statement."This left many retirement plan participants searching for answersand guidance that was simply not provided by their provider. Atthis critical time, plan providers are largely failing to providethe guidance needed by participants to make smart decisions to helpthem prepare for retirement."

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Some of the top-level findings in the J.D. Power study: 29% ofrespondents said they were either unaware that retirement advice isavailable or they thought it was unavailable to them; 15% ofparticipants said they'd received a personal communication viatheir provider's mobile app; and 22% of respondents said they hadnot interacted with their retirement provider in the past 12months.

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"This is a problem for providers because frequency ofinteraction is directly correlated to participant satisfaction,"J.D. Power's study said.

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The report ranked plan providers in three categories "based ontheir overall mix of business in terms of average plan size." Bankof America and Charles Schwab ranked highest in a tie, andPrincipal Financial Group was third, in the large plan segment,according to J.D. Power. Bank of America, Charles Schwab andOneAmerica led the medium-plan segment, the report said, andFidelity Investments, AIG Retirement Services and Nationwide weretops in the small-plan segment.

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"It's impossible to overstate the financial implications forfirms that get the participant satisfaction formula right duringthis make-or-break moment," Foy said. "Historically, some planproviders have been focused only on the plan sponsor and, whilethat is changing somewhat, firms need to be laser focused onparticipants as well."

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Mike Scarcella is a senior editor at ALM inWashington, D.C. Contact him at [email protected] and on Twitter@MikeScarcella.

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Mike Scarcella

Mike Scarcella is a senior editor in Washington on ALM Media's regulatory desk. Contact him at [email protected]. On Twitter: @MikeScarcella. Mike works on a slate of newsletters: Supreme Court Brief | Higher Law | Compliance Hot Spots | Labor of Law.