Increased interest in incorporating ESG principles in defined contribution retirement plans, leveraging collective investment trusts (CITs) and offering financial wellness tools as a value-add are some of the latest trends on the minds of consultants and advisors, according to T. Rowe Price’s 2021 Defined Contribution Research Study conducted in partnership with Schaus Group.

Michael Davis, T. Rowe Price’s head of defined contribution plan specialists, told Benefits PRO that the survey responses from 32 consultant and advisory firms jibes well with data that the Baltimore-based recordkeeper has also collected from 6,400 plan participants and more than 450 plan sponsors.

Survey results revealed key themes:

Strong interest and dialogue around adopting ESG principles.
“Consultants and advisors said that plan sponsors are interested in ESG principles primarily to increase positive engagement with participants and to align with sponsoring entities’ sustainability goals,” Davis says.

“The majority of plan participants are willing to allocate to ESG, but their primary interest was in investment return. When asked if they had to choose between the two, more participants preferred investment returns over ESG principles, which we thought was interesting.”

With respect to implementation of ESG, 40 percent of study respondents indicated preference for actively-managed ESG investment strategies; only 10 percent said passive ESG investment strategies were preferable.

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