PSNC 2016: CEO Roundtable

Leaders at Morningstar, BlackRock and John Hancock discussed retirement industry trends and challenges.

By John Manganaro | June 16, 2016
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The second day of the PLANSPONSOR National Conference in Washington, D.C., kicked off with a panel of long-time retirement industry thought leaders, asked to describe the main challenges that face retirement plan sponsors and the defined contribution (DC) plan industry more broadly.

The esteemed panelists included Brock Johnson, president of retirement solutions for Morningstar; Anne Ackerley, head of U.S. and Canada defined contribution business for BlackRock; and Peter Gordon, CEO of John Hancock Retirement Plan Services.

The panelists all have decades of experience in the industry, but all three agreed that right now is among the most exciting and fast-moving times they have seen for the DC world. Johnson was quick to note that, at least at his firm, retirement is “clearly the quickest growing business we have.” The others agreed, noting their firms' histories in serving the DC market.

“From our perspective at Morningstar, we have seen a real fundamental change in the way the retirement conversation plays out in the workplace and in our wider culture,” Johnson said. “At one time we were more focused, I think it’s fair to say, on supplementing the retirement income of wealthier individuals so they could live out their retirement dreams through savings in discretionary accounts.”

Today, something different is playing out for defined contribution plan providers and investment companies serving the space—and for plan sponsors.

“We see more and more that there is huge demand for something entirely different,” Johnson said. “As the DC world continues to take hold and become the normal approach to retirement planning, our industry is being called on to help people who are working toward a basic level of stability, not a retirement dream. It’s absolutely critical for providers and plan sponsors alike to grasp this and work toward it—to understand that this work is not a choice. It’s necessary.”

In other words, according to Ackerley, the DC industry is being called on to do what employer-run pensions used to do for many people. 

“The most important question we have to ask right now is, how do we as DC providers and plan sponsors get people saving earlier and saving more, and to stay in the right investment and to stay the course?” she asked. “Those are the three levers sponsors have, and we’ve already seen that auto[matic] features can be very powerful here. We need to push things even further.” 

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