Plan Sponsor Review Activity is at a Peak: A Retention Crisis for Recordkeepers

Key Highlgihts

• Plan sponsor review activity is at a historic high — 27% of sponsors are expected to conduct a new recordkeeper search in 2026, while 56% plan benchmarking reviews, and roughly 1 in 3 reviewing sponsors is seriously considering a switch.
• Expectations have shifted from pricing to strategic capability — sponsors now evaluate recordkeepers on SECURE 2.0 readiness, PEP support, participant personalization, cybersecurity posture, and real-time data accessibility during RFP evaluations.
• PEP readiness is no longer optional — with PEP assets exceeding $21 billion and 20% of reviewing sponsors actively considering a PEP structure, recordkeepers that can’t support scalable multi-employer administration face immediate competitive disadvantage.
• Participant personalization is a retention differentiator — 88% of recordkeepers now view personalization as a strategic priority and 82% are increasing analytics investment, reflecting sponsor demand for AI-driven, digital-first participant engagement at scale.
• Modernization is the only viable retention strategy — recordkeepers running on legacy systems with manual compliance workflows, fragmented payroll integrations, and limited self-service capabilities are the most exposed to sponsor churn in 2026.

The retirement plan recordkeeping industry is entering one of its most competitive phases in recent years. According to Cerulli Associates, 27% of plan sponsors are expected to conduct a new recordkeeper search in 2026, while 56% plan to perform due diligence reviews to benchmark fees and services against competitors. While not every review results in a provider change, the scale of evaluation activity signals a deeper shift in plan sponsor expectations.

As Chris Bailey, Director at Cerulli, noted: “Approximately one out of every three plan sponsors conducting a review is seriously considering a change, while the other two are merely performing a benchmarking exercise.” That means plan sponsors are evaluating alternatives, and the stakes for recordkeepers are real.

For recordkeepers operating on aging systems or fragmented technology stacks, the risk of plan sponsor churn is high. This article explores why plan sponsor review activity has surged in 2026, the key factors driving retention risks for recordkeepers, and the strategies firms must adopt to strengthen competitiveness, improve sponsor confidence, and retain market share in an increasingly scrutinized environment.

Why are plan sponsors reviewing recordkeepers more aggressively in 2026?

Historically, sponsors focused heavily on pricing and core administrative functions. Today, they are evaluating recordkeepers on broader strategic capabilities, including scalability, participant engagement, compliance readiness, and digital modernization.

The drivers of this elevated review environment are:

• SECURE 2.0 compliance complexity.
• Fee compression across the retirement industry.
• Growing interest in pooled employer plans (PEPs).
• Increased scrutiny of operational efficiency and cybersecurity.
• Demand for modern integrations and real-time data accessibility.
• Rising expectations around personalization and participant experience.

The growing gap between sponsor expectations and recordkeeper capabilities

The challenge for recordkeepers is that sponsor expectations have evolved more quickly than many recordkeeping operating models and technology infrastructures. Features that were once viewed as differentiators, such as digital participant engagement, API-based integrations, automated compliance workflows, and scalable PEP administration, are now baseline expectations during RFP evaluations.

Here is why traditional recordkeeping approaches are losing ground:

PEP readiness is becoming a competitive requirement

According to Cerulli’s U.S. Retirement Markets 2025 report, 20% of plan sponsors planning a recordkeeper review are actively considering a PEP structure during the evaluation process. PEP assets surpassed $21 billion by the end of 2024, while the number of pooled plans grew from 109 in 2021 to 339 by 2024. Recordkeepers that cannot support scalable multi-employer administration, pooled asset handling, and streamlined sponsor servicing face great pressure during RFP evaluations.

Compliance complexity is intensifying in the small-plan market

SECURE 2.0’s automatic enrollment mandates are accelerating small-plan formation, but they are also increasing operational demands on recordkeepers. Sponsors now expect proactive support around SECURE 2.0 implementation, plan restatements, and Roth catch-up contribution requirements effective January 1, 2026. Legacy systems that rely on fragmented payroll synchronization or manual compliance workflows create operational risk during sponsor reviews.

Participant personalization is becoming a retention advantage

Cerulli reports that 88% of recordkeepers now view participant personalization as a strategic priority, while 82% are increasing investments in participant analytics. Sponsors increasingly value providers that can deliver digital engagement, AI-driven experiences, and flexible, API-based integrations that support personalized participant journeys at scale.

Why has modernization become a retention imperative?

As review activity accelerates, recordkeepers need technology partners that help them scale efficiently, respond more quickly to regulatory changes, and deliver a modern experience for sponsors and participants.

Recordkeepers now need technology infrastructure and service models such as:

• Real-time reporting and data accessibility.
• Automated SECURE 2.0 compliance and restatement workflows.
• Digital self-service capabilities for sponsors and participants.
• Scalable platforms capable of supporting PEP administration.
• AI-enabled participant engagement and personalization tools.
• Cloud-based systems that improve operational flexibility and cybersecurity.
• API-driven integration capabilities across payroll, advisory, and fintech ecosystems.
• Streamlined payroll-to-recordkeeping synchronization for evolving contribution requirements.

These improvements help recordkeepers build trust with sponsors, retain their clients, and compete effectively in a market under greater scrutiny.

How does Congruent Solutions address the retention crisis head-on?

Congruent Solutions helps recordkeepers modernize with confidence. Through its CORE platform and retirement technology expertise, Congruent Solutions enables recordkeepers to address the operational and strategic challenges driving sponsor reviews in 2026. Its capabilities include:

• CORE PlanSuite for AI-powered plan onboarding and conversions.
• MEPs/PEPs support for scalable pooled plan administration.
• Automated SECURE 2.0 compliance, restatements, and compliance testing.
• CORE Mapper for API-driven payroll and fintech integrations.
• Broadridge and Finch integrations for streamlined data exchange.
• Participant self-service and digital engagement capabilities.
• BPaaS and plan administration services for scalable operational support.
• Cloud-native, AI-powered infrastructure built for modernization and growth.

Connect with the Congruent Solutions team today to help your organization modernize retirement operations and improve sponsor retention.