Mercer Research: DC Plan Sponsors Pivot to AI, Wellness, and Delegation

The Market's Pivot Toward Integrated Solutions#

Retirement plan sponsorship is undergoing a fundamental strategic shift. New research from Mercer, released in November 2025, surveying 225 U.S. defined contribution plan decision-makers, reveals a marketplace increasingly preoccupied with technology adoption, financial wellness expansion, and the outsourcing of plan administration—a convergence that validates MMC's bet on unified advisory as the defining competitive moat in professional services. The survey findings, independently corroborated by coverage in Pensions & Investments and HR Executive, paint a portrait of benefits leaders evolving from transactional administrators into strategic technology integrators and risk managers. Sponsors are not merely adopting tools in piecemeal fashion; they are fundamentally reconsidering the architecture of their retirement benefit strategies to address interconnected challenges spanning investment performance, participant engagement, regulatory complexity, and fiduciary liability.

The timing of this research is particularly significant given that MMC has positioned the unified Marsh brand—consolidating its four major business units (Marsh, Guy Carpenter, Mercer, and Oliver Wyman) into a single identity launching in January 2026—as the vehicle through which it will deliver precisely the kind of multidisciplinary solutions that sponsor survey data now reveals are in high demand. For institutional investors evaluating MMC's strategic narrative around brand consolidation and integrated advisory, the Mercer research functions as external validation. Sponsors are not asking for more specialized boutique services; they are explicitly seeking advisors capable of orchestrating solutions across investment strategy, benefit design, technology enablement, and governance architecture. Mercer's position as MMC's dominant player in benefits and human capital consulting means that the firm is uniquely positioned to translate these sponsor imperatives into revenue expansion and margin growth in the years ahead, particularly as the unified Marsh identity gains market traction.

Understanding AI's Strategic Role in Retirement Benefits#

Artificial intelligence has emerged as the defining technology frontier for defined contribution plan sponsorship, with adoption rates and perceived strategic importance far exceeding what many industry observers might have anticipated. According to the Mercer survey, forty-four percent of DC plan sponsors identify artificial intelligence as the technology that will have the biggest impact on their plan's success over the next three to five years—a striking figure that reflects both the operational potential of AI applications and the strategic anxiety that surrounds technology adoption in an industry historically skeptical of rapid digital transformation. Beyond those citing AI as the top technology priority, the research reveals that sixty-seven percent of sponsors are either actively exploring or implementing AI and advanced analytics into their plan strategy. This is not a minority of forward-thinking outliers; it represents a supermajority of the market moving in concert toward AI-enabled retirement solutions, driven by competition among peer sponsors and by pressure from participants demanding more sophisticated, personalized benefits experiences.

The applications sponsors envision for artificial intelligence span investment analytics, automated administrative task execution, personalized participant guidance, and fraud detection—a portfolio of use cases that reflects the full scope of plan operations from participant communication to fiduciary decision-making. MMC, through its Mercer subsidiary, has the analytical depth and domain expertise to serve as a strategic advisor to sponsors contemplating AI deployment, whether through proprietary Mercer-developed solutions or through partnerships with third-party AI vendors. The firm's Q3 2025 earnings, announced in mid-October, demonstrated that this kind of advisory value command is gaining traction in the market: the company reported eleven percent revenue growth and a thirteen percent increase in adjusted operating income, signaling that clients are willing to compensate MMC for the intellectual capital required to navigate complex transformation. For Mercer's positioning within MMC, AI advisory has become a critical lever for deepening client relationships and justifying premium pricing in an increasingly crowded benefits consulting marketplace.

Building Organizational Capacity for AI-Enabled Benefits#

What the Mercer survey makes clear is that AI adoption in retirement benefits is not a tactical question about selecting a particular technology platform; it is a strategic question about organizational capability and governance. Sponsors are asking themselves how to deploy AI in ways that enhance fiduciary decision-making without creating new liability vectors or introducing untested systems into heavily regulated benefit plans. This is where MMC's integrated advisory model becomes differentiated. Mercer can advise on the technology landscape, help sponsors evaluate vendor options, and critically, provide governance frameworks and compliance oversight that help plan sponsors deploy AI confidently within their fiduciary framework. The Mercer research also revealed that nearly sixty percent of sponsors are concerned about cost increases and litigation risks, meaning that AI deployment strategies that simultaneously reduce administrative burden and strengthen governance documentation will appeal directly to sponsor pain points.

By positioning Mercer as both a technology strategist and a fiduciary risk advisor, MMC is essentially claiming that unified advisory is not a luxury but a necessity in an era when technology adoption and fiduciary responsibility are inextricably linked. The firm's ability to synthesize technology guidance with governance and risk management creates a competitive moat that specialist technology vendors or boutique advisors cannot replicate without equivalent breadth of advisory capability. For institutional investors tracking MMC's execution on the unified brand strategy, success in building a distinctive AI advisory positioning within Mercer will be a critical marker of whether the firm can translate its multidisciplinary expertise into measurable revenue growth and margin expansion in the years ahead.

Financial Wellness as the Anchor Tenant of Sponsor Strategy#

While artificial intelligence captures headlines, the deeper story in the Mercer research concerns the elevation of financial wellness from a peripheral benefit offering into the centerpiece of sponsor strategy. Thirty-nine percent of DC plan sponsors named the expansion of financial wellness programs as their number one priority for the coming year—a commanding plurality that dwarfs all other strategic objectives. This is not a novel observation; financial wellness has been a trending topic in benefits circles for several years. What makes the Mercer finding significant is the magnitude of sponsor commitment and the clarity it provides about market direction. Among sponsors who already operate financial wellness programs, sixty-eight percent report that their program is meeting expectations, and approximately one quarter say it has exceeded expectations—suggesting that the programs are not merely marketing window dressing but are delivering measurable participant engagement and satisfaction. Critically, fifty-eight percent of plans surveyed indicated they are likely to expand their financial wellness offerings over the next twelve months, representing sustained investment in an increasingly crowded market segment.

Mercer's ownership of this strategic trend carries implications for MMC's competitive positioning and revenue trajectory. The firm has been a thought leader in financial wellness consulting for years, and the new data validates that sponsor appetite for expanded programming is robust. The research also reveals the critical role that recordkeepers play as the distribution channel for financial wellness solutions: just over half of sponsors pass full responsibility for financial wellness to their recordkeeper, while another forty-two percent rely on recordkeepers working in tandem with external advisors like Mercer. This dual-channel model creates an opportunity for Mercer to position itself as the "gold-standard" partner for recordkeepers seeking to enhance their financial wellness offerings or as a direct-to-sponsor advisor for those seeking premium, customized solutions that go beyond what recordkeepers can deliver. The strategic leverage here is that sponsors are clearly willing to layer external advisory expertise on top of recordkeeper capabilities, meaning that Mercer can compete not by displacing recordkeepers but by complementing them with higher-value strategic guidance on wellness program design, participant communication, and outcomes measurement.

From Program to Strategic Lever#

The Mercer survey data reveals that financial wellness is no longer a standalone employee morale initiative; it has become integrated into the broader sponsor conversation about participant outcomes and long-term retirement security. The research uncovered significant employee anxiety about retirement readiness, with nearly sixty percent of employees across all generations expressing concern about whether they will be financially able to retire. The Employee Benefit Research Institute's separate 2025 Retirement Confidence Survey, which sampled approximately twenty-seven hundred workers and retirees, corroborated this anxiety: only sixty-seven percent of workers feel confident they will have enough money to live comfortably throughout retirement. The cost of living crisis is exacerbating these concerns; eighty-one percent of workers surveyed by EBRI report concern that increasing living costs will make it harder to save as much as they wish, while fifty-six percent agree that healthcare cost inflation is negatively impacting their savings capacity. This constellation of fears creates a structural demand for financial wellness programming that goes beyond simple retirement calculators or generic participant education.

For Mercer, this anxiety is an addressable market opportunity. Sponsors recognize that financial wellness is now a competitive necessity—a tool for talent retention and a lever for demonstrating corporate commitment to employee financial security in tight labor markets. The Mercer research itself noted that among sponsor respondents with existing financial wellness programs, the programs are widely perceived as meeting or exceeding expectations, suggesting that quality design and execution matter. By leveraging Mercer's expertise in behavioral finance, retirement readiness analytics, and personalized guidance frameworks, MMC can position itself as capable of delivering financial wellness solutions that move beyond check-box compliance into genuine participant behavior change and retirement security improvement. This positioning aligns directly with the unified Marsh brand narrative: in a world of mounting complexity and interconnected challenges, generalist advisors who can orchestrate solutions across benefits design, technology, and participant communication are winning mandates that specialist-only competitors cannot.

The Distribution Economics and Recordkeeper Partnerships#

The Mercer research illuminates a crucial insight about distribution and competitive dynamics in benefits advisory: recordkeepers have become the primary venue for sponsor access to financial wellness solutions, but they are not the only path to market. The fact that only fifty-one percent of sponsors place full responsibility for financial wellness with their recordkeeper, while forty-two percent prefer a partnership model with external advisors, suggests that sponsors view recordkeeper-native solutions as incomplete and are actively seeking external expertise to augment what recordkeepers provide. This opens a distinctive competitive lane for Mercer. Rather than competing head-to-head with recordkeepers for full plan administration, Mercer can position itself as the premium advisor that recordkeeper clients turn to when they want strategic design support, benchmark comparative analysis, or advanced analytics that individual recordkeeper platforms cannot match.

The economics of this model are favorable to Mercer: it allows the firm to capture advisory margins without taking on the operational and technology infrastructure costs associated with running a recordkeeping platform. For institutional investors evaluating MMC's ability to drive margin expansion in its benefits business, this partnership model with recordkeepers represents a scalable, asset-light growth avenue that could drive outsized returns on invested capital. The fact that over half of sponsors are willing to layer premium advisory expertise on top of recordkeeper platforms validates the business model: as recordkeepers expand their financial wellness offerings, they simultaneously increase demand for Mercer's design and analytics services. This creates a virtuous cycle in which market innovation by recordkeepers creates direct advisory opportunities for MMC, turning what might appear to be competitive displacement into a complementary growth channel.

The Outsourcing Paradox: Delegation as Governance and Cost Solution#

One of the most striking findings from the Mercer research is the accelerating trend toward delegation of plan administration and decision-making authority, a phenomenon that appears counterintuitive at first but becomes strategic when viewed through the lens of sponsor risk management and cost control. Eighty-three percent of the surveyed sponsors are considering either partial or full delegation of plan management to external advisors—a figure that breaks down into sixty-three percent considering partial delegation and twenty percent exploring full delegation scenarios. The fact that eighty-four percent of companies already rely on external consultants or advisors in some capacity suggests that the question for most sponsors is not whether to delegate but how much to delegate and to whom. This trend has profound implications for the advisory economics of the benefits business. As sponsors outsource decision-making authority to advisors with deeper expertise and better infrastructure, they create durable, high-margin relationships for firms like Mercer that can deliver governance solutions, fiduciary oversight, and strategic guidance under delegation frameworks.

The financial case for delegation is direct and measurable. Over half of plan sponsors report benefiting from their consultant's ability to secure lower fee share classes in their investment lineups, with seventy-two percent of those sponsors achieving fee reductions in the range of five to ten basis points. For a mid-sized plan with fifty million dollars in assets under management, a reduction of even seven and a half basis points translates to approximately thirty-seven thousand five hundred dollars in annual savings—savings that justify retaining an external advisor whose annual fees might range from fifteen thousand to forty thousand dollars. Interest in alternative plan structures—multiple employer plans (MEPs) and pooled employer plans (PEPs)—is also rising, with thirty-six percent of sponsors currently considering a switch and another thirty-one percent indicating they might do so in the future. These alternative structures are often attractive precisely because they enable sponsors to aggregate purchasing power and reduce per-capita administrative costs while gaining access to broader investment options and governance infrastructure. Mercer, as a major advisor in the benefits space with deep relationships across the MEP and PEP ecosystem, is well-positioned to guide sponsors through these transitions and to capture advisory fees in the process.

Why Sponsors Delegate: The Fiduciary Liability Equation#

Beneath the financial calculus of delegation lies a more fundamental driver: the growing complexity of fiduciary liability and governance requirements in the retirement benefits space. The Mercer research uncovered persistent legal challenges facing plan sponsors, with nineteen percent of respondents reporting that they have faced litigation or legal action in the past five years. The majority of these cases settled out of court, but the reputational and financial costs have been substantial: sixty-one percent of companies reported notable increases in fiduciary liability insurance premiums over the past five years, a trend that reflects insurance carriers' growing concern about sponsor governance deficiencies and the rising cost of litigation defense in the defined contribution space. The courts, increasingly sophisticated in their review of benefit plan administration, are now scrutinizing areas such as the use and oversight of managed accounts, the details of participant fee disclosure, and the documentation surrounding investment decision processes. This evolution places substantial pressure on sponsors to maintain robust governance frameworks and thorough administrative documentation—requirements that often exceed the in-house capability of benefits teams at many mid-size and even large companies.

Delegation, in this context, is not an abdication of fiduciary responsibility but a strategic choice to transfer operational execution to advisors with specialized expertise and better documented governance processes. The Mercer research found that nearly half of respondents who have employed a 3(38) or 402(a) fiduciary relationship (essentially, advisors serving as delegated decision-makers under ERISA's regulatory framework) report a reduction in fiduciary liability insurance premiums as a result. Insurance carriers recognize that properly structured delegation relationships, with clear governance protocols and documented advisor accountability, actually reduce risk for sponsors compared to trying to manage all decisions in-house. For Mercer and other major benefits advisors, this regulatory environment creates a structural tailwind: the more complex the compliance landscape becomes, the greater the economic and legal incentive for sponsors to delegate to advisors with deeper expertise and better infrastructure. This dynamic is particularly favorable to large, well-established advisory firms like Mercer that can invest in governance expertise and documentation discipline that smaller, boutique competitors cannot match.

Cost and Risk Mitigation Through Structured Delegation#

The Mercer findings on delegation are reinforced by broader industry data on the motivations driving the trend. Plan sponsors are caught in a vise: they face pressure to contain cost growth while also managing an expanding array of fiduciary obligations, regulatory changes, and participant demands for more sophisticated benefit design and participant communications. Delegation provides a pressure relief valve by allowing sponsors to externalize both decision-making authority and operational responsibility, thereby reducing internal staffing requirements and aligning compensation for advisors with sponsor objectives through fixed-fee or performance-based advisory arrangements. Beyond fee reductions and fiduciary liability insurance benefits, sponsors benefit from delegation through improved governance documentation, enhanced investment manager selection and oversight, and more sophisticated plan design and participant communication strategies.

When Mercer serves as a delegated fiduciary for a sponsor, the firm brings to bear its analytical infrastructure, industry benchmarks, and documented governance processes—assets that individual sponsors, even large institutional ones, often cannot match internally. This creates a partnership dynamic where the advisor's success is directly tied to the sponsor's success, and where the advisor's expertise and governance discipline become sources of competitive advantage for the sponsor in managing its retirement benefit obligations. For MMC, the economic opportunity embedded in the delegation trend is substantial: delegation relationships typically command higher fees than transactional advisory, they create stickier client relationships with higher switching costs, and they enable the firm to deepen penetration with existing sponsors while expanding the scope of advisory services provided to each client relationship. As the complexity of retirement benefits administration continues to grow and regulatory scrutiny intensifies, the structural tailwind supporting delegation relationships should accelerate, directly benefiting MMC's advisory business.

Retirement Income Solutions and the Holistic Financial Security Agenda#

The Mercer research reveals a final strategic trend that bridges retirement benefits planning with broader employee financial security: the growing focus on retirement income solutions and guaranteed lifetime income products. Thirty-five percent of sponsors listed adding retirement income solutions among their top three priorities for the coming twelve months, indicating substantial and sustained interest in solutions that help participants transition from accumulation (during working years) to distribution (during retirement). This finding aligns with broader market data on worker demand for retirement income certainty. According to EBRI, three-fourths of workers are interested in a default investment option that includes an allocation to guaranteed lifetime income—an remarkably high figure that suggests workers are increasingly anxious about longevity risk and market volatility in their retirement years. Fifty-five percent of workers expect guaranteed income products to be a source of income during retirement, yet only about one-third of current retirees actually use such products, indicating a significant gap between expectation and current market reality.

For Mercer and MMC more broadly, the expanding interest in guaranteed income solutions creates an opportunity to deepen relationships with sponsors and to extend the advisory footprint beyond traditional defined contribution plan administration into the broader estate of retirement and financial security products and services. Guaranteed income solutions often require coordination across multiple product types—annuities, pension buyout strategies, longevity insurance, and other vehicles—and demand sophisticated analysis of participant needs, tax planning, and benefit design tradeoffs. This is precisely the kind of multidisciplinary analysis that the unified Marsh brand is positioned to deliver, leveraging expertise across Mercer's benefits consulting, Oliver Wyman's analytical prowess, and the broader ecosystem of MMC's financial advisory services. For institutional investors evaluating MMC's competitive positioning and long-term growth trajectory in the benefits advisory space, the demand signal for retirement income solutions represents a meaningful revenue expansion opportunity that is just beginning to be realized at scale.

Guaranteed Income Growing Traction with Retirement Plans#

The movement toward guaranteed income and retirement income solutions is driven by both sponsor interest and regulatory evolution. The SECURE Act 2.0, passed in late 2022 and implemented in phases through 2025, created regulatory pathways for plans to offer annuity options and to facilitate participants' purchases of guaranteed income products. The Mercer research shows that sponsor awareness of these regulatory opportunities is translating into concrete plan design changes, with thirty-five percent of respondents listing retirement income solutions as a top priority. What distinguishes this trend from earlier waves of interest in guaranteed income is the explicit linkage to broader financial wellness and participant security strategies. Sponsors are not adopting retirement income solutions solely to de-risk their own pension liabilities (a driver for defined benefit plan sponsors); rather, they are adding these solutions as participant benefits that directly address worker anxiety about retirement readiness and longevity risk. The Mercer 2025 Health on Demand survey, which sampled a broader population of employees beyond just DC plan participants, found that nearly sixty percent of employees across all generations are concerned about being financially able to retire, and that healthcare cost uncertainty is a major factor driving that concern. In this context, sponsors view guaranteed income solutions as a tangible response to worker financial anxiety and as a competitive tool for attracting and retaining talent.

The market gap between worker demand for guaranteed income and current adoption levels presents a clear growth opportunity for advisors like Mercer that can design comprehensive retirement income strategies. Approximately twenty-five percent of workers are expected to use workplace savings to purchase a guaranteed lifetime income product after retirement, yet fewer than one-third of current retirees actually do so. This suggests that current-generation sponsors, many of whom are in the early phases of adding retirement income solutions to their plans, could see significant participant uptake if the solutions are well-designed, properly communicated, and integrated into broader retirement planning guidance. Mercer's depth of expertise in benefits design, participant communication, and financial wellness positions the firm to help sponsors navigate these design decisions and to capture advisory revenue as retirement income solutions become table-stakes benefits for mid-sized and larger plan sponsors.

Closing the Healthcare Planning Gap#

The Mercer research and the supporting EBRI data reveal a critical gap in participant financial planning: the majority of workers have not adequately planned for healthcare costs in retirement. Only forty percent of workers have actually calculated how much money they will need to cover health expenses during retirement, and just one in four have purchased long-term care insurance. This planning deficit has real consequences for retirees; EBRI found that more than one-third of retirees report that their healthcare and dental expenses have been higher than expected in retirement. For plan sponsors, this gap represents both a challenge and an opportunity. Healthcare and longevity risk are increasingly important factors in retirement income planning, yet many sponsors lack sophisticated tools or advisory support to help participants understand and plan for these costs.

Mercer, with its deep expertise in health benefit design and employee benefits strategy, is well-positioned to help sponsors address this gap by integrating healthcare cost planning into their broader financial wellness and retirement income strategies. The firm can advise sponsors on plan design features that incentivize healthcare savings (health savings accounts, for example), on communication strategies that help participants understand their healthcare obligations in retirement, and on insurance solutions that help protect participants against catastrophic healthcare costs. By expanding its advisory scope from traditional retirement benefits planning into the integrated domain of healthcare, longevity, and financial security planning, Mercer can deepen its value proposition to sponsors and create higher switching costs that insulate the firm from competitive pressure from specialty vendors or low-cost alternatives. The Mercer research demonstrates that this gap is real and material: the fact that sponsors are increasingly listing retirement income solutions as a top priority, combined with worker anxiety about healthcare costs, means that integrated solutions that address healthcare planning alongside retirement savings will command premium pricing from sponsors seeking to deliver comprehensive financial security to their employees.

Outlook#

Strategic Validation and Near-Term Catalysts#

The Mercer research findings on DC plan sponsor priorities and strategy validate the central thesis underlying MMC's unified Marsh brand consolidation and Bloomberg partnership announced in October 2025. Sponsors are explicitly seeking advisors capable of orchestrating integrated solutions across technology adoption, benefit design, risk management, and participant engagement. The convergence of AI adoption pressure, financial wellness expansion, delegation trends, and retirement income solution demand is creating an environment in which generalist advisory firms with deep expertise across multiple benefit domains are winning mandates and commanding premium pricing relative to specialists focused on single product categories or service lines. Mercer's research demonstrates that this market dynamic is not a theoretical construct but a present-day reality reflected in the actual stated priorities and intended behavior of real benefit sponsors making material capital allocation and advisory relationship decisions.

The near-term catalysts for validating this thesis include the formal launch of the unified Marsh brand in January 2026, which will mark a critical moment in demonstrating to the market whether the rebranding enhances or dilutes MMC's competitive positioning in benefits advisory. Investors should monitor early market reaction to the rebranding and any commentary from management on mandate wins or deepened relationships attributable to the unified brand strategy. Additional catalysts include Mercer's positioning in the retirement income solutions market as the SECURE Act 2.0 implementation accelerates, the firm's success in securing advisory relationships with sponsors implementing AI and advanced analytics into their benefit strategies, and the evidence of margin expansion in the benefits business segment as delegation relationships and higher-value advisory services drive fee realization. The research also points to meaningful opportunity for MMC in healthcare-linked financial wellness offerings and in partnerships with recordkeepers seeking to enhance their value proposition to plan sponsors seeking premium advisory support.

Risk Landscape and Execution Dependencies#

Risks to the strategy remain material and warrant close scrutiny from institutional investors. Execution risk during the brand transition is always present when consolidating distinct business identities, and there is a genuine possibility that the unified Marsh brand could dilute the specialized reputations that individual businesses like Mercer, Oliver Wyman, and Guy Carpenter have cultivated over decades of market presence. If the four business units fail to coordinate messaging or if the consolidated brand is perceived as generic or diluted relative to the specialist identities, the value proposition of the rebranding could be undermined before it gains market traction. Additionally, the delegation trend that the research documents could equally benefit competitors like Aon, Willis Towers Watson, and specialized advisory boutiques if MMC or Mercer fails to differentiate itself from alternatives in the crowded advisor marketplace.

Technology risk is also material: the success of Mercer's advisory positioning in helping sponsors navigate AI adoption depends on the firm's ability to develop or partner with best-in-class AI solutions and to maintain thought leadership and credibility as the technology landscape evolves rapidly. Finally, the healthcare cost planning opportunity documented in the research will require MMC to expand its advisory scope beyond traditional retirement benefits consulting into the more complex domain of healthcare strategy and longevity risk management—an expansion that demands capabilities that may require acquisitions or significant internal capability development. If MMC successfully executes on these catalysts while managing the risks, the Mercer research suggests that the retirement benefits advisory market is entering a period of accelerating growth and consolidation around integrated advisory players—a dynamic that should benefit MMC as a category leader with unmatched depth of expertise and client relationships in the benefits advisory space.