A recent Mercer whitepaper suggests the top priorities defined contribution (DC) plan sponsors should have for 2021, including focusing on employee wellness, implementing emergency savings accounts and making more digital tools available.

The report lists six things employers should prioritize in the new year, including understanding participant values, designing plans for the benefit of participants, communicating and educating in a digital world, monitoring recordkeeper consolidation, considering outsourcing options and reassessing investment opportunities.

Neil Lloyd, head of U.S. defined contribution (DC) and financial wellness research at Mercer, notes that, throughout the past year, many employers were more concerned about their participants and the employee experience than retirement planning. “We saw a focus on the employee-centric approach. What they’re seeing through COVID-19 is that you can’t just focus on retirement issues,” he told PLANSPONSOR.

Instead, employers are focused on crafting plans based on employee values. According to the whitepaper, employers responding to the Employee Benefits Research Institute (EBRI) 2020 “Employer Financial Well-Being Survey” said most participants are interested in emergency funds or emergency hardship assistance. Some plans are even currently adding emergency savings accounts or financial coaching.

The Mercer report recommends employers identify participants who are nearing or in retirement; review how participants are using the plan; identify participant needs; familiarize themselves with available retirement income solutions; and establish a time frame and strategy to implement their priorities.

The COVID-19 pandemic and the transition to  remote work have shown employers the importance of connecting digitally. Currently, one in three companies now anticipates that half or more of their employees will work remotely post-pandemic, Mercer says.

Coinciding with the transition to remote work, in May, the Department of Labor (DOL) finalized its electronic delivery regulations to permit e-delivery of required retirement plan documents. These new developments could mean employers will provide digital communications and strategies related to their retirement plans. For example, the whitepaper notes that plan sponsors wanting their recordkeeper to implement a digital communications strategy can monitor uptake and adapt to find the most effective messaging.

“Although people still want to talk to a person, these days people say they don’t want to meet face-to-face,” Lloyd says. “This is an opportunity for 2021—to see how you can make digital strategies really work for your participant base.”

As the new year rolls in, more employers might be interested in pooled employer plans (PEPs) administered by pooled plan providers (PPPs). The Mercer report asked employers to consider whether expanding these outsourcing options is practical for the plan sponsor and for participants. While some will want to maintain some responsibilities, others say they see benefits from outsourcing.

The report also says plan sponsors should reassess investment opportunities, especially given the market volatility throughout 2020. Re-evaluating the investment lineup and streamlining choices can improve diversification and returns. Additionally, the popularity of investment options including environmental, social and governance (ESG) investing could sway some employers to consider implementing such approaches, but they must be sure any changes are based on pecuniary factors. Plan sponsors contemplating ESG investing will need to “carefully consider” how they deal with the investments, according to the report.