Despite market gains and rising participant confidence, a new report from Voya Investment Management reveals a growing difference between perception and reality in the retirement landscape.
Sponsors remain overly optimist, with 91% believing employees are prepared for retirement, yet only 69% of participants feel the same.
Highlighted in Voya’s 2025 “Challenges and Opportunities for Defined Contribution Specialists” survey, sponsors may be out of sync with the real concerns and behaviors of those they serve. While participant confidence has improved from 63% in 2023, DC specialists remain the msot grounded, with 70% estimating participant readiness.
The study, conducted from January 2025, surveyed plan sponsors, DC specialists and 500 contributing participants. Retirement income planning emerged as a top priority, driven by the SECURE Acts and an aging workforce.
“One of the many factors driving this optimism may be the long-running equity bull market,” said Brian Houston, senior vice president, Business Development Manager, DCIO, Voya IM.
Seventy-seven percent of sponsors said adding income solutions is a key goal for the next two years, and many now rank guidance on these products as the most valuable service specialists can offer.
Target date funds remain foundational included in most plans. Three in four specialists and three in five sponsors use them, and nearly half of non-adopters express interest. Meanwhile, both groups increasingly support tiered investment menus, tailored for different participant needs.
Sponsors, however, are less worried about offering too many options, 70% say it can hinder decisions, down 82% last year.
Caregivers and employees with special financial needs remain under-recognized. Over 80% of sponsors and specialists believe caregivers represent less than 20% of participants, despite far higher national rates, according to AARP.
“Our data show strong alignment between sponsors and specialists on the importance of supporting participants’ holistic financial well-being,” added Houston.
For DC specialist, the opportunity lies in better communication and targeted education. Sponsors welcome help with financial wellness programs and income guidance, but many don’t perceive the full extent of specialist’ involvement, highlighting a gap in how value is communicated.
In a landscape where alignment is slowly improving, understanding participants’ real needs, and acting on them, may be the key to unlocking stronger retirement outcomes.
