The Plan Sponsor Council of America (PSCA) National Conference is known for showcasing the unique challenges and opportunities facing plan sponsors and this year’s conference had many highlights. We have noted some of the most popular topics being discussed and summarized them for you here.

1. Focus on Employee Financial Wellnes—Understanding Employee Needs

The start to 2025 has been marked by significant market volatility resulting from a combination of economic conditions, fiscal policy, and monetary policy. For the average retirement plan participant, this volatility created concern regarding budgeting, job security, safety of investments, and more.

The opening session of the conference focused on understanding the gap between what employees need vs. what employers think they need (in the context of financial benefits). The panel discussed the amount of time that employees spend at work worrying about finances, and how their concerns impact their productivity, mental health, and more. Despite this distraction, employees self-reported that less than 1 in 3 spoke with a financial professional in the past three years. One key takeaway was that plan sponsors should ask their advisor, recordkeeper, and other vendors for resources or services that can help employees with financial education.

This theme continued in a keynote session on “Balancing Your Wealth: Integrating Financial and Mental Wellness.”  PNC senior employee education advisor, Jen Rivera, led a panel on discussing the intersection of financial and mental wellness. The conversation focused on what plan sponsors can do to support their employees in accessing the financial education and coaching necessary to achieve financial wellness. 

We recommend: Plan sponsors should evaluate the financial education resources that are available through their advisor and/or recordkeeper and consider supplementing existing efforts to cover any gaps. Programs without an education strategy should consider implementing a program with a holistic focus on employee well-being. 

2. Focus on Investment—Know Your Why

This year’s investment workshop session focused on qualified default investment alternative (QDIA) selection, particularly regarding target date funds (TDF). It is common for participants to invest their entire account balance in a TDF due to the QDIA or the desire to have professional investment management. This increases the importance of a robust TDF selection process by the plan’s investment decision makers and a diligent ongoing monitoring process, both of which are fiduciary duties.

The session acknowledged how easy it can be to fall into the cycle of reviewing investment performance and fees on a regular basis without taking the time to conduct a more complete target date fund review. However, to meet the “prudent expert” standard required of investment fiduciaries, it was recommended that plan sponsors engage a process that follows the guidelines suggested in the Department of Labor’s factsheet, “Target Date Retirement Funds – Tips for ERISA Plan Fiduciaries.”

Finally, the conversation shifted to documentation of process with a focus on the importance of maintaining a fiduciary file, including best practices around executive summaries and meeting minutes. It is important for plan sponsors to document that they are performing this type of detailed TDF review – both for preserving continuity of decision-making as well as to satisfy any questions from regulators, attorneys, or plan participants around the target date fund selection process.

We recommend: Plan sponsors should conduct a full TDF review at least every three years and ad hoc if major workforce changes occur (e.g., major acquisition, freezing or terminating a defined benefit plan). With regular review, the TDF will remain appropriate for the workforce and allow the committee to make changes if necessary. See the our article, Plan Sponsor Perspectives: Target Date Fund Selection and Monitoring, for more information.

3. Focus on Public Policy — Regulatory and Fiduciary Risk

One of the keynote sessions focused on a “Washington Update.” With key provisions of the 2017 Tax Cuts and Jobs Act expiring in 2025, there is some discussion that if Congress acts to extend tax cuts beyond 2025, retirement policy might change as a result. Plan sponsors have spent recent years keeping up with implementation dates for key provisions in SECURE 2.0, in addition to evaluating the efficacy of optional provisions (e.g., emergency savings accounts and matching student loan payments).

From a future focus standpoint, three topics dominated the discussion:

  • Automatic enrollment created an interesting debate between those that believe it should be mandatory for every plan (~66% of the crowd) against those who believe each plan should be allowed to decide what is most appropriate for their organization. There is the potential that this topic becomes part of future regulatory packages (i.e., SECURE 3.0).
  • Private market investments, including private equity, private credit, and private real estate, were popular topics. While some argued the strong return potential, long time horizon matching retirement time horizons, and advances in liquidity management make the asset class suitable for retirement plans, others argued the complexity and potential illiquidity would create more risk than reward for plan sponsors and their participants.
  • Artificial Intelligence (AI), including using the technology to record meeting minutes, store and query plan documents, and more, dominated the conversation. Plan sponsors discussed the balance between easing administrative burdens and the potential risks associated with mistakes (by both plan sponsors and AI)

We recommend: To stay on top of a changing regulatory and fiduciary risk environment, plan sponsors should work with their advisors to plan their time spent engaging with fiduciary education. One best practice is implementing an annual schedule of key meeting topics and creating meeting agendas in advance. This “checklist” can help the committee efficiently execute on key fiduciary responsibilities regularly.

Overall, plan sponsors are showing their dedication to fulfilling their fiduciary duties and commitment to improving the financial wellbeing of their employees. As we move toward year end, we look forward to continuing the conversation. Please contact your PNC Institutional Asset Management® representative for more information.