By Randy Myers
Retirement plan sponsors are increasingly confident their employees will be able to retire when they want, but still harbor significant concerns about retirement readiness, regulatory requirements, litigation, and plan administration, according to a new survey by MFS Investment Management.
The survey also reveals substantial differences between how plan sponsors assess their employees’ retirement prospects and how employees view their own financial readiness, particularly among older workers.
Jonathan Barry, senior managing director and head of client solutions in the Strategy and Insights Group at MFS, discussed the findings at the 2026 Stable Value Investment Association Fall Forum. The survey, conducted in conjunction with the Defined Contribution Institutional Investment Association, drew responses from 153 plan sponsors representing more than $400 billion in retirement plan assets and nearly one million participants. MFS also conducted similar surveys of retirement plan participants and advisors.
Only 33% of plan sponsors said they were very or extremely confident their participants would be able to retire at their desired age. While that was an improvement from 18% in the previous survey, Barry said the results suggest that much work remains to be done.
“We want to see these numbers get a lot better over time, and we all can play a role in making that happen,” he said.
The survey found that higher levels of plan sponsor confidence were closely associated with strong participant contribution rates, participant engagement with their plan, and participant use of available retirement planning tools. Conversely, plan sponsors expressing less confidence frequently attributed their views to economic conditions, inadequate contribution levels, and limited participant engagement.
A Disconnect Between Employers and Employees
Plan sponsors’ assessments of retirement readiness don’t always jibe with participants’ expectations. While 51% of sponsors expressed confidence their Generation X employees would be able to retire when they wanted, for example, only 24% of Gen X participants shared that confidence. For baby boomers, 66% of plan sponsors expressed confidence, compared with just 37% of participants. Differences were smaller among younger generations.
Barry suggested those disconnects could have implications for workforce management, particularly if employees nearing traditional retirement age remain on the job longer than employers anticipate.
“I think this is identifying a real blind spot that sponsors have,” he said.
Both plan sponsors and participants agreed that competing financial priorities interfere with retirement savings. Seventy-three percent of plan sponsors said obligations such as student loan payments, emergency savings, and other household expenses had a moderate or major impact on participants’ ability to save for retirement. Among participants, 83% reported that competing financial obligations were an obstacle.
Barry said those findings underscore the importance of considering retirement benefits alongside other financial wellness programs, including student loan assistance and emergency savings accounts.
Regulatory and Litigation Concerns Dominate
When asked what keeps them awake at night, 66% of plan sponsors identified the changing regulatory and legislative landscape as one of their three leading concerns. Litigation risk followed at 47%, while 44% cited administrative burdens.
Concerns varied by plan size. Litigation risk ranked among the top three concerns for large and mega plans, while smaller plan sponsors were more likely to be focused on participation rates, administrative responsibilities, and fees. Conversely, plans of all sizes named the changing regulatory landscape their top worry.
The survey also found that 22% of respondents acknowledged having faced a class-action lawsuit related to their DC plan. Another 17% declined to answer the question.
Barry argued that litigation concerns are discouraging innovation in defined contribution plans, potentially limiting plan sponsors’ willingness to adopt new approaches to improving retirement outcomes.
Retirement Income and Private Assets Draw Limited Interest
While much of the retirement industry has been promoting opportunities to add new features to their retirement plan offerings, including retirement income solutions and private assets, plan sponsors seem less eager for change.
Forty-six percent of plan sponsors said they do not currently offer retirement income products. Thirty percent said they consider existing investment options, including conservative fixed-income strategies, to be retirement income solutions. Only 21% reported they had specifically added retirement income products to their plans.
Among plan sponsors not already offering an income solution, 68% said they were either unlikely to implement one within the next 12 to 18 months or had no plans to do so. Yet 79% of surveyed participants ages 45 and older said they would be likely to use an employer-sponsored retirement income solution if one were available.
Barry cautioned that such responses may overstate actual demand, particularly when participants learn about potential limitations on liquidity and flexibility.
Interest in private assets also appears limited, although plan sponsors do seem more open to them than digital assets such as cryptocurrency. Approximately 30% of plan sponsors said they were evaluating or likely to implement private investments. Eighty-eight percent said they were not considering digital assets.
Still, Barry suggested industry enthusiasm for private investments has outpaced participants’ interest in them.
“There’s a lot of supply and not that much demand [for private assets] at this point,” he said.
Stable Value Remains a Mainstay
The survey found little change in plan sponsors’ use of capital preservation options. Fifty-seven percent of plan sponsors reported offering stable value as their sole capital preservation option, up modestly from the prior year’s survey. Another 27% offered both stable value and money market funds, while approximately 14% offered only money market funds.
Barry questioned the value of offering both types of investments. “I think having two is very confusing for participants,” he said.
The survey also found that 11% of plan sponsors were considering adding a capital preservation option to their investment menus. Barry speculated that many were contemplating adding money market funds, given their relatively attractive yields in the recent interest-rate environment, but emphasized that the survey had not asked which specific investments plan sponsors were considering. None of the respondents indicated they might eliminate a capital preservation option.
Barry encouraged plan sponsors to periodically review their investment menus, even when they have no plans to make significant changes. He said plan sponsors that conduct frequent investment reviews tend to express greater confidence in their participants’ retirement prospects.
Improving Retirement Outcomes
Barry closed his presentation by reiterating opportunities plan sponsors have to strengthen retirement readiness. He said adopting automatic enrollment and automatic escalation of participant contribution features, offering financial wellness programs tailored to different employee demographics, regularly reviewing investment menus, and providing greater access to professional advice can all contribute to the effort. Nearly 75% of surveyed plan sponsors already provide access to an advisor, Barry noted, although participants often fail to take advantage of those services.
“There’s no magic bullet here, but there are small things that we think can be done to help move the needle a bit,” Barry concluded.