Mercer’s research shows US Defined Contribution (DC) plan sponsors are prioritizing financial wellness, AI integration and delegation in 2026 

November 12, 2023
New York, United States

Today Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, released findings from its inaugural annual survey, Voice of the Plan Sponsor: 2025 Defined Contribution (DC) Practices. The analysis reveals that DC plan sponsors are placing a growing emphasis on financial wellness and cost efficiency. To that end, many are actively exploring innovative plan designs and advanced investment solutions, such as pooled employer plans (PEPs) and artificial intelligence (AI) strategies. 

When asked about their top three priorities for the coming year, plan sponsors reported a near equal focus on financial wellness for participants (39%), followed closely by ensuring regulatory compliance (37%) and reducing costs (36%) in their plan.

“Our research reveals that employers are walking a tight rope between balancing cost pressures, regulatory risks and participant expectations, while addressing their own business needs in an environment of increasing regulatory scrutiny,” said Holly Verdeyen, Mercer US’s Defined Contribution Leader. 

Despite the majority (75%) of plans expecting to see a slight or significant increase in their plan budget for the coming year, cost-cutting was a central theme among respondents. Seventy percent of employers surveyed are either taking or planning to take action to lower their plan costs. Of the plan sponsors looking to reduce their costs, more than half (54%) reported that they were currently changing plan design characteristics, such as vesting or automatic features, or would consider doing so. 

As seen in many parts of the broader economy, AI is viewed as a high-impact technology by DC plan decision-makers, with 44% stating that AI will have the greatest impact on the success of their plan over the next three- to five-year period. In fact, two-thirds (67%) of plan sponsors reported that they are actively exploring or currently implementing AI or advanced analytics into their DC plan strategy, while a further 26% are interested but not actively exploring these strategies.

“We expect that AI will transform retirement plans and participant experiences by enhancing investment management and enabling plan sponsors to meet participants where they are, tailoring advice and communications to their unique situations,” said Ms. Verdeyen. “With AI, plan sponsors can use predictive analytics and real-time monitoring to respond to market changes, and AI-powered education and personalized advice can improve participants’ financial literacy.”

The report highlights the growing role that external advisors play in the management of retirement plans, including shaping investment strategy, governance and administration. Plan sponsors are increasingly turning to external consultants and advisors to outsource many fiduciary tasks, and an overwhelming 84% of plan sponsors currently rely on external consultants or advisors in some capacity to assist with fiduciary responsibilities. In fact, 51% of respondents reported benefiting from lower negotiated investment management fees through their consultants, and 45% reported reductions in the company’s fiduciary liability insurance premiums since delegating defined contribution plan functions to an Outsourced Chief Investment Officer (OCIO) provider.

The survey highlighted a growing interest in PEPs and multiple-employer plans (MEPs), which offer a more comprehensive outsourcing solution by consolidating fiduciary and administrative responsibilities under a single pooled plan provider. The shift reflects a heightened desire among sponsors to provide competitive financial wellness benefits to their employees in a cost-effective manner.

With cost reduction top of mind in 2026, when asked about which cost-saving measures plan sponsors would consider implementing, 29% reported they are currently using or considering a MEP or PEP specifically as a way to lower plan costs. More broadly, 67% of plan sponsors said they are considering switching to a MEP or PEP or may consider it in the future. 

“PEPs and MEPs offer employers a way to lower plan costs and fees while providing strong fiduciary oversight and administrative efficiencies,” said Preston Traverse, Mercer US’s DC Mid-Market Leader. “Pooled employer plans strike a happy medium for employers of all sizes between offering a comprehensive and cost-effective retirement plan and optimizing internal resources to focus on the core pieces of their HR delivery.” 

This research was conducted in July 2025 via an online survey targeting decision-makers at US single-employer DC plans. Mercer received 225 responses from a diverse range of employers, representing plans with over $77 billion in assets under management. The full report can be accessed here.

Mercer, a business of Marsh McLennan (NYSE: MMC), is a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people. Marsh McLennan is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of over $24 billion and more than 90,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective. For more information, visit mercer.com. Follow Mercer on LinkedIn and X.