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Recordkeepers Adjust to Pandemic

Coronavirus

Recordkeepers have acted quickly to incorporate social distancing and follow stay-at-home orders in response to the Coronavirus pandemic—including a whopping 98% of staffers working at home—a new survey finds.

That’s a huge jump from the 20% reported three months ago, according to a summary of the survey released April 21 by the SPARK Institute and the Defined Contribution Institutional Investment Association (DCIIA). The transition to working at home has gone smoothly for survey respondents, say SPARK and DCIIA, which they attribute to the recordkeeping industry having work-at-home procedures in place for the last 10 years or more.  

The transition has had some repercussions, including a heightened focus on cybersecurity, providing necessary technology to employees, and online team calls. None of the surveyed companies plans to lay off or cut staff, the report finds, although many have imposed hiring freezes on some business units. 

The survey, which included responses from 21 firms, was conducted during the week of April 12.

In the face of a significant increase in the number of distribution requests and questions, the survey indicates that more than two-thirds of respondents are meeting their service level agreements (SLAs) to clients.

As for those clients, the survey shows that approximately half of plan sponsors are considering reducing the employer contributions they make until the crisis is over. And many have decided to put their requests for proposals (RFPs) on hold, out of concern with managing paperwork and required document signatures, payroll and staffing issues, as well as a lack of necessary technology infrastructure. 

Participants, SPARK and DCIIA say, are looking more to loans and hardship withdrawals than to shifting investments. Those who are making investment changes are favoring shifts to fixed income products. “We hope that both plan sponsors and participants will strive to maintain a long-term view in their retirement planning,” said DCIIA President and CEO Lew Minsky in a press release.

SPARK and DCIIA also report that more than 80% of respondents already had updated their systems and procedures to accommodate the CARES Act, and an additional 9% expect to very soon. 

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