Defined contribution consulting and advice

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I'm Holly Verdeyen, US Defined Contribution leader at Mercer. We see at least four megatrends accelerating the OCIO discussion for defined contribution plan sponsors. First, workforce volatility from the great resignation. Second, data and data security. Third, employee well-being. And fourth, corporate social responsibility. At the very top of these is a really startling statistic. 44% of American workers at all levels are searching for a job.

Employers are being pulled in too many directions, and they need to focus internally on retaining talent and adapting to the new shape of work in the US. For internal investment in HR teams, they're experiencing turnover themselves. And some now lack the internal expertise or capacity to stay ahead of both DC product evolution and changing regulatory guidelines. Furthermore, the spotlight is once again being turned on fiduciary committee decisions.

And as a result, we're seeing plan sponsors consider hiring an OCIO provider who can help them adapt to whatever the markets and the litigators and the regulators are throwing their way. Another megatrend is record keepers using digitalization and artificial intelligence to drive both personalization and innovation. Plan sponsors are using data to refine their plan designs and also their employee communications to offer more comprehensive, forward-looking, targeted, and inclusive retirement plans.

So along these lines, the definition of financial wellness is expanding to embrace employee well-being, which is a broader metric that encompasses physical, as well as mental and also financial health. Mercer's own research shows that only 34% of employees feel secure for today and tomorrow. And 8 in 10 workers are feeling the risk of burnout. And so we see more and more employers prioritizing the whole-person well-being of their people.

We know that nothing stays the same in defined contribution for very long. So plan sponsors need a dynamic solution that can respond and adapt to changes over time and an OCIO provider who keeps a close eye on the changing environment to help plan sponsors anticipate and act quickly. A prime example is corporate social responsibility. So ESG and DEI, they both fall under this umbrella. And both, we think, have applications and DC plans.

So plan sponsors who need help adapting ESG and vetting women and minority-owned vendors are also incorporating diversity, equity, and inclusion goals through plan design, they may want to consider an OCIO with specialized expertise in these areas. And Mercer's DC OCIO approach is designed to help address each client's unique needs and to adapt as those needs evolve from accessing global research and advice to full investment outsourcing, as well as governance and plan administration support.

So what makes us different? Well, first, we use our deep experience across our health, investments, retirement, and career business lines, working within the employer-employee relationships in a way that puts your people first. Second, being outcome driven. That means using your plan data to help you understand and define the outcomes that you need to achieve, which increases the likelihood of meeting them.

And finally, third, aligning with your key stakeholders, your employees, your HR and finance teams, your record keeper, and other vendors in a collaborative way to implement our ideas. Ultimately, these are the needs of our clients. And so we make delivering these three things our goals, which makes us a more relatable and valuable partner to plan sponsors.

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