Skip navigation
coronavirus-markets-chart.jpg Ca-ssis/iStock/Getty Images Plus

2020 Retirement Advisor Plan Year in Review

The influence of the COVID-19 pandemic dominated the retirement plan space in 2020.

Participants in past reviews typically cited a range of topics. Not surprisingly, the COVID-19 pandemic’s influence dominated this year’s comments when asked several leading industry participants to share their insights on key developments in 2020.

Beth Ashmore
Managing Director, Retirement
Willis Towers Watson

In looking at 2020, sponsors were just beginning to process the implications of the SECURE Act when they were forced to deal with the implications of COVID-19 and the racial unrest from the summer. The net effect is that employers have focused particular attention on how retirement programs provide flexibility and support for individual employees’ needs. For example, there was a rush of activity related to addressing the provisions in the CARES Act that allowed employees access to their retirement accounts via loans and withdrawals. Companies’ increased commitment to inclusion and diversity has led to a focus on how retirement plan provisions support those objectives and identifying whether there are segments of the employee population that are at risk from a financial security perspective. 

Employers still maintain a significant focus on risk management relative to the operations of their defined contribution plans. This was certainly tested in 2020 with the disruptions organizations faced as they adapted to work changes brought about by COVID-19 or adapted their staffing levels to accommodate changing business conditions.

Byron Beebe
North America Retirement Market Leader and Senior Partner

COVID-19 has had an impact on almost everything and retirement plan consulting is no exception. Implementing changes allowed under the CARES Act was a focus in the first part of the year, as plan sponsors and plan participants experienced volatile markets. 

During the remainder of the year, retirement consultants learned how to serve plan sponsors and participants remotely. Not meeting in person has been difficult, but it has also created new opportunities and innovation. Participant service centers have learned how to answer calls remotely and work together internally through video calls and screen sharing. Group meetings with plan participants have been replaced by five-minute on-demand videos. The industry has learned how to deliver more information electronically, and participants have gotten more comfortable with online tools. Fiduciary committee meetings have been conducted via videoconference, and business travel has been reduced dramatically.

While we look forward to days where we can gather together again for in-person meetings, many of the changes that have been implemented are likely here to stay.

Anthony Bunnell
Head of Retirement
Morgan Stanley at Work

Without a doubt sales and service interactions with both plan sponsors and participants have been dramatically affected by COVID-19. The role of the retirement advisor has never been more pronounced as it was this year whether the changes were legislative (e.g., SECURE + CARES Act), investment related (managing the March lows with the December highs), or simply planning for both sponsors and employees. There was also a seismic shift to digital where the industry had to pivot to online and videoconferencing at scale. While certain clients and client sizes (i.e., technology companies and large geographically dispersed companies) were less impacted, smaller organizations and their respective service providers had a bigger lift. This enhanced digital first delivery method has been a material change in how value is being delivered to retirement clients.

Robert Melia
Executive Director
Institutional Retirement Income Council

Obviously, the pandemic had an all-encompassing effect on our country and the retirement plan business was certainly not spared. The pandemic caused many to be disenfranchised from their employment, many lost their job, all saw their DC balance fall during the early parts of the pandemic when markets started to spiral down, many that lost their job were forced to take a distribution from their DC plan, legislation passed that affected/liberalized withdrawals and loans, match and profit sharing for many companies was reduced. In short, the high level of retirement confidence in 2019 was shaken in the spring of this year. 

What also became apparent was the resilience of the economy and the retirement system. Most participants stayed the course, and as markets recovered (and reached new highs) their retirement balances did as well. Participants that listened to service providers and were fortunate enough to have six-plus months emergency funds were able to survive without dipping into retirement savings, so financial wellness programs proved to be a good investment for sponsors and providers. As the prospects of vaccines help the economy fend off a prolonged recession, companies are starting to reinstate matching contributions and participants are anticipating a return to normalcy. 

With the above, consultants that promoted a stay-the-course strategy proved to be prudent in their philosophy. Consultants that promoted keeping assets in plans (instead of rolling over) were ahead of their time to partially offset those that had no recourse but to use some of their retirement savings to keep their homes and otherwise survive. Consultants that promoted consideration of guaranteed investments and guaranteed income within their plan saw the value of such products early on in the pandemic and saw that those with such products were not shaken in their retirement confidence or their retirement preparedness. For some a hard lesson, but those that hammered home diversity, stay the course, don’t panic, add guarantees and guaranteed income saw their consultative wisdom prove its worth during this turbulent year.

Pete Welsh
Head of Retirement Services
Millennium Trust Company

COVID-19 has undoubtedly had a significant impact on many industries in 2020. For example, the airline industry saw a major reduction in travelers, health care organizations and universities underwent operational shifts that drastically affected revenues, many not-for-profits have seen a decline in donations, struggling retailers have filed for bankruptcy, and the tourism and hospitality industries have basically come to a standstill. In contrast, other industries like manufacturing and streaming services, have more business than ever before.

Companies experiencing a decline in revenues, in many cases, have had to lay off employees, which has a direct effect on plan population and participation for plan sponsors. Other challenges, particularly in the defined benefit space, include the low rate environment and market volatility, which has impacted funded status. In the defined contribution space, plan sponsors have had to temporarily eliminate their company match, and in some cases, the fear of losing their jobs or being furloughed has had an effect on participants’ plan contributions. Consultants work with these plan sponsors to establish a plan that helps them navigate these challenging times.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.