Employers embrace AI in rethinking retirement plan strategy

• Key Insight: Learn why plan sponsors are restricting AI to administrative tasks instead of fiduciary roles.
• What's at Stake: Workers navigating critical transition decisions when retirement plan support falls short.
• Supporting Data: 29% of employers willing to use AI for fiduciary governance.
  Source: Bullets generated by AI with editorial review

Employers are warming up to AI as a tool to help workers make better retirement decisions, but they remain cautious about handing the technology fiduciary responsibilities, according to a new survey.

Employers' comfort level is highest when it comes to back-office and communication tasks, with 79% willing to use AI for plan analytics, 73% for automating routine processes, and 72% for personalizing employee communications, the WTW 2026 Defined Contribution Survey revealed.

The hesitation grows when AI moves from administrative support into areas that carry greater risk: Only 37% of employers are willing to use it for compliance and risk management, while fewer support its use for recordkeeper oversight (33%) and fiduciary governance (29%). 

Underlying that hesitation are concerns about data privacy and security, which were cited by 74% of employers. Respondents were allowed to select multiple options.

"Employers are most comfortable using AI where it can make retirement programs more responsive, efficient and insight driven," said Chris West, senior managing director and defined contribution strategy leader at employee benefits consulting firm WTW. "The opportunity is to use these tools to better engage participants, streamline administration, and help sponsors understand where plan design, investment strategy, and participant support can have the greatest impact."

That focus on improving retirement outcomes comes as employers increasingly expect more from their defined contribution plans. The survey found that enhancing the employee experience (69%) and improving retirement outcomes (63%) are the top objectives for the next two years, while three in four employers rank retirement savings as a core or top priority within total rewards.

Yet many plans are still measured, governed and delivered for a different era, creating a gap between what employers expect and what their plans are designed to achieve. Sponsors are reassessing governance, resources and plan design as they look to turn retirement benefits from a workplace offering into a more effective tool for helping employees prepare for retirement.

Read more: More workers are off track for retirement, but employer resources could help

"The retirement outcomes gap is a call to action," West said. "Employers have invested heavily in retirement programs, but the next challenge is proving these programs are moving employees closer to retirement readiness. Advanced analytics can help sponsors see where gaps are emerging and what actions may matter most, leading to more impactful solutions and better outcomes."

The WTW 2026 Defined Contribution Survey surveyed 547 U.S. employers that sponsor a defined contribution plan from April 15 to May 22. More than 60% oversee at least $1 billion in defined contribution assets, 42% have 10,000 or more employees, and 72% also manage a defined benefit plan.

Closing the retirement outcomes gap

Retirement plan sponsors are rethinking how they allocate resources as they work to close the retirement outcomes gap. The report concluded that many sponsors will need to rebalance the time and resources devoted to administration and governance. One in five sponsors are looking to delegate future delivery support, transferring administration and fiduciary responsibilities so their teams can focus more on strategies designed to improve participant outcomes.

Read more: AI alone isn't enough: Employees still want trusted financial support

Plans have gotten better at helping employees accumulate savings, the survey found, but support often falls short during the transition into retirement, when workers face critical decisions about readiness, distribution options and investments that determine whether savings can generate sustainable income. To strengthen that support, 3 out of 10 sponsors plan to offer an in-plan retirement income solution.

"Headlines keep telling workers they need a specific amount of retirement savings," said Dave Amendola, managing director and intellectual capital and innovation leader of defined contribution strategy at WTW. "Even retirement professionals struggle to say what the numbers mean until they are translated into a monthly lifestyle. That is the gap employers are wrestling with: helping employees understand what their savings actually mean and supporting confident decisions that help convert an account balance into retirement income."