The 401(k) industry has been a laggard in adopting contemporary technology, but trends suggest that ongoing developments are quickly transforming the retirement space. Legacy recordkeeping systems and outdated technology in the retirement plan industry have led to high costs, data inaccuracy, administrative difficulties, and rigid plan designs. It also has created barriers to entry for businesses that do not have the financial or administrative resources to support a quality 401(k) plan.
Digital recordkeeping platforms and 401k plan administration software are using technologies like AI and ML. It will help change the landscape by providing an easy-to-use, cost-effective solution for organizations of all sizes. Technology is making it possible for more businesses to offer 401(k) plans to their employees, ultimately helping more Americans save for retirement.
As plan administrators and recordkeepers, you must know the latest technology trends to make informed decisions. You can sustain against lowering fees and rising competition to serve clients better by staying up-to-date on the latest developments.
Here are some tech trends you need to be aware of:
1. Using data analytics to improve plan management: Data analytics can help you identify issues with a retirement plan, such as high levels of leakage or low participation rates. Using an AI and ML-driven retirement plan administration platform for data analytics, you can ensure end-to-end plan monitoring and data accuracy at all times. Based on the insights, you can suggest changes to the plan to improve plan outcomes for participants.
2. Offering digital tools: Robo-advisors, mobile apps, and other self-service tools offer a convenient way for participants to access their retirement accounts. Besides providing automated investment advice, these tools simplify client servicing. You can assist plan sponsors in resolving participant queries and concerns quickly and efficiently.
3. Generating more leads: Plan providers can use digital tools to attract more leads. Social media, websites, and online events are becoming an efficient way to establish relationships in a remote-first environment. Digital tools are allowing retirement plan administrators to connect with plan sponsors. You can actively find new clients and generate more business through social media.
4. Personalizing plan administration services: Plan administrators now offer personalized services to their clients to gain a competitive advantage. Including customized advice and guidance on managing your client’s retirement plans and participant accounts is a key differentiator. Automating routine processes is allowing plan administrators to spend more time understanding their client requirements and delivering better plan outcomes. You can assist them in matching student loan repayments, managing ESG funds, and handling cryptocurrency transactions for a hyper-personalized experience.
5. Offering additional services: Plan administrators can also use technology to offer additional services to help plan sponsors manage their 401(k) plans better. From financial planning, investment advice, and tax preparation for participants to DOl and ERISA compliance for sponsors, technology can assist plan service providers to offer more to their clients. By offering these services, administrators can stay ahead of the competition by proactively managing the seasonal workload.
With so many changes in the world of retirement planning, retirement plan administrators and recordkeepers must stay up-to-date on the latest trends. Adopting these trends can streamline your processes, save time, and offer more value to clients. Your goal should be to use technology to improve the overall experience for the plan sponsor and the participant.
Retirement plan administration software providers like Congruent Solutions can help you offer a better user experience and new services. You can opt for our CORE platform for end-to-end plan administration services that can improve the overall efficiency of your operations.