There are significant challenges for 401(k) and 403(b) record keepers still relying on outdated technology, much of it built in the 1990s using mainframe coding like COBOL. As the number of retirement plans grows, these aging systems struggle to meet the evolving needs of plan sponsors and participants. Issues such as slow processing times, poor digital interfaces, and difficulty integrating new technologies like AI are becoming more apparent. This is driving industry consolidation as providers work to meet growing demands, but upgrading these systems remains costly and complex.
John Hancock is tackling these challenges with its new Future Choice platform. Built with modern technology, the platform aims to provide more flexible and efficient solutions for various plan sizes, including small and start-up plans. It will integrate AI, APIs, and other tools to improve performance. However, the transition to this new system will take time, as many of Hancock’s clients continue to use older systems that are still working well. As Hancock moves forward, other providers may follow suit, upgrading their technology to meet the industry’s evolving demands.
Catch more insights in Fred Barstein’s latest column, “Record Keeper Technology Stymieing the 401(k) Industry.“
