DC Plan Trends: Initial Impacts of CARES Act Implementation (US)

The CARES (Coronavirus Aid, Relief, and Economic Security) Act was a $2 trillion stimulus bill passed by Congress and signed into law in response to the economic impact of the global Coronavirus pandemic. This act included several key provisions for retirement plans.

Actions we are seeing in DC Plans

Given current market volatility, many DC plan sponsors are asking what we are seeing in the DC market, and how others are responding to current provisions of the CARES Act. Generally, we are seeing that participants are not taking immediate action, sponsors are implementing changes to their plans where they deem necessary, and recordkeepers are being responsive to participant and plan needs.

Participant Activity

We continue to monitor this activity to see what impact the CARES Act and employment status changes may have on participant activities.

Plan Sponsor Activities

  • The recordkeepers have estimated that less than 5% of sponsors are reducing or ceasing company contributions.
  • Aon surveyed its clients and less than 9% as of April 10 have suspended, reduced, or deferred employer contributions
  • Sponsors are being thoughtful about implementing fund line-up changes and recordkeeper changes, weighing the potential impact of extended blackout windows and transition costs associated with trading. Some have kept to the original timing while other sponsors have postponed the changes to later in the year

Recordkeeper Observations

Actions You Can Take

  • Monitor your recordkeeper’s call center average wait time and call abandonment rate and review against any service-level agreements you may have in place with your recordkeeper
  • Ensure your employees know about webcasts and additional digital content available to help answer their questions
  • Understand how your employees are reacting by reviewing your recordkeeper’s reports on participant activity around deferral changes, loans and withdrawals
  • Work with your consultant, recordkeeper, and legal counsel to determine what provisions of the CARES Act you want to adopt for your plan, including if any provisions that were not originally implemented should be in the future. Consider whether any provisions require an opt-out versus opt-in approach by your recordkeeper
  • Leverage your recordkeeper’s education and communication program and resources to keep participants apprised of savings and investment considerations. Some plan sponsors are considering sending special communications to their participants rather than just making sure their recordkeepers communicate sufficiently

We will continue to gather information from the recordkeepers and will provide an update post CARES Act to help keep you informed about what we are observing about participant behavior and plan sponsor actions in DC Plans.


The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice.

* Data is based on Aon analysis and a survey of 12 major national DC recordkeepers out of 18 contacted by Aon. Recordkeepers reported on activity for different time periods, generally for the end of February through the middle/ end of March 2020 (pre-CARES Act). None of the respondents paid a fee to participate in the survey


The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Information contained herein is for informational purposes only and should not be considered investment advice. Investment advice and consulting services provided by Aon Investments USA Inc. (Aon Investments). The information contained herein is given as of the date hereof and does not purport to give information as of any other date. The delivery at any time shall not, under any circumstances, create any implication that there has been a change in the information set forth herein since the date hereof or any obligation to update or provide amendments hereto.

This document is not intended to provide, and shall not be relied upon for, accounting, legal or tax advice or investment recommendations. Any accounting, legal, or taxation position described in this presentation is a general statement and shall only be used as a guide. It does not constitute accounting, legal, and tax advice and is based on Aon Investments understanding of current laws and interpretation.

This document is intended for general information purposes only and should not be construed as advice or opinions on any specific facts or circumstances. The comments in this summary are based upon Aon Investments preliminary analysis of publicly available information. The content of this document is made available on an “as is” basis, without warranty of any kind. Aon Investments disclaims any legal liability to any person or organization for loss or damage caused by or resulting from any reliance placed on that content. Aon Investments reserves all rights to the content of this document. No part of this document may be reproduced, stored, or transmitted by any means without the express written consent of Aon Investments.

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