Subject: Survey
Less than 5% of Americans Took Early Retirement Withdrawals Due to COVID-19: NEPC Survey
NEPC, LLC, one of the largest independent, research-driven investment consulting firms, conducted a poll about COVID-19's impact on the retirement landscape, receiving 105 responses from defined contribution plan sponsors.
The findings quell some of the largest fears about the potentially detrimental impact of the pandemic and economic disruption on retirement savings:
- The vast majority (77%) of employers kept their match and don't plan to lower or suspend it. Only half furloughed or laid off any staff.
- 91% of plan sponsors report less than 5% of Americans made an early withdrawal from their retirement account, as permitted by the CARES Act. 51% don't anticipate an increase in coronavirus-related distributions this year.
- 9 in 10 are confident in their investment menu and believe they offer the right mix of options to withstand volatility.
"Our survey reveals that with the tremendous volatility amid the COVID-19 pandemic, plan sponsors' number one priority is communicating with participants to help them navigate this period of disruption and make the best decisions for their future," said Ross Bremen, Partner in NEPC's Defined Contribution practice. "Between the SECURE Act, the CARES Act, and the DOL's ruling on private equity's inclusion in plans, there is also tremendous legislative and regulatory change to react to."
Plan sponsors ranked their priorities as follows:
Investment Priorities |
Plan Priorities |
1. Consider the role of active offerings within the program |
1. Review participant communication and messaging |
2. No special investment priorities, business as usual |
2. Consider and/or review advice offering |
3. Consider the role of passive offerings within the program |
3. Review plan fees |
4. Review the performance and/or appropriateness of QDIA (if applicable) |
4. Review cybersecurity practices |
5. Considering adding additional investment choices |
5. Review auto features |
6. Consider removing existing investment choices |
6. Review plan distribution rules |
About NEPC, LLC
NEPC is an independent investment consultant and private wealth advisor with more than 30 years' experience. Combining a proprietary research team dedicated to the long-term challenges facing institutional and high-net investors, with our unique client-centric model, NEPC builds forward-looking investment portfolios.
We service over 350 retainer clients representing assets over $1.1 trillion from our offices in Boston, Atlanta, Charlotte, Chicago, Detroit, Las Vegas, Portland, and San Francisco.
To learn more about NEPC, visit nepc.com.
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