From Defined Contribution Pensions to AI: The Evolution of Retirement Planning | Benefits and Pension Monitor Industry News
Mark Dowdell, Gallagher’s national practice leader, talks about the growth in the benefits landscape.
Mark Dowdell, national practice leader at Gallagher, has 30 years of experience in the retirement and investment markets and says the sector has come a long way in that time.
“When I started my career in 1992, defined contribution plans were becoming the way of the future,” he explains. And a lot of sponsors were making that investment decision. The decision was ultimately left to the planning members. So from a governance perspective, we not only needed to communicate about the movement of employer money, but we also needed to wrap our heads around the options available to plan members. ”
However, it got a little easier with the advent of targeted risk funds, but these funds did not fully address the need for risk aversion strategies. It wasn’t until the mid-2000s that this really started to improve.
“Target date funds have significantly improved the plan member experience,” Dowdell added. “The CAP guidelines also created a good framework to help advisors, plan sponsors, committees, and plan members decide what to do with these plans.”
Dowdell also noted that these guidelines have not evolved much since their inception, but is optimistic about the upcoming consultation draft of the CAP guidelines, which he hopes will bring needed updates. There is.
Over the past decade, sponsors of non-pension plans have been required to formalize governance procedures and investment policies.
“Over the past decade, there has been a real push towards group RSPs and deferred profit distribution plans to formalize governance procedures and investment policies,” Dowdell added.
We have also improved transparency in advisor fees, but there is still room for progress.
“More advisors are now formalizing service agreements with clients and being transparent about the fees they are paid,” he says.
Looking ahead, Dowdell identifies the critical challenges facing plan sponsors. One of the most pressing issues is the question of funding, how plan members manage their funds in retirement. Another challenge is ensuring inclusivity in retirement plans. Historically, defined contribution plans have been considered the best option, but they are not suitable for everyone.
“As we come forward and look at plans through a comprehensive lens, the fact that money is locked into someone who may not be able to work their entire career is not in the best interest of that employee. Maybe.”
And this inclusivity challenge has led to discussions about helping employees save for their futures through a range of schemes such as pensions, RSPs and tax-free savings accounts.
“This really started the conversation about helping employees save for their future savings goals in plans of their choice,” Dowdell added.
This future will undoubtedly include the emergence of new technologies and the adoption of AI by industry leaders. But this is also underscored by what Dowdell sees as the anxiety people feel when working on their own financial plans.
“I feel like there’s a friction or inertia within myself if I just send my net worth report to my financial advisor because it’s homework,” Dowdell adds, adding that you can quickly submit a claim using the benefits app. He contrasted it with simplicity and emphasized the need for technology. Streamline your financial planning process.
Dowdell is optimistic about how technology can reduce this friction, especially through the integration of demographic and payroll data by record keepers.
“Recordkeepers know me better than ever before because they’re getting demographic and payroll feeds,” he says, adding that they’re giving plan members information instead of pulling them in. He added that he believes pushing out can help people with limited financial knowledge better understand their financial future.
And at Gallagher, we’re wasting no time exploring the opportunities that AI can bring to both our internal teams and the people they serve.
“At the moment, Mr. Gallagher is looking at how AI can be leveraged not just for internal processes, but also for our clients. We are investing heavily in this area for records managers to reap the benefits. I know that.”
free e-newsletter
Our daily newsletter is free and brings you the latest information on benefits and pensions. To receive the daily e-newsletter from Benefits and Pensions Monitor, please fill out the form below and click “Sign Up.”
free e-newsletter
Our daily newsletter is free and brings you the latest information on benefits and pensions.
