They would do the latter by improving investment education, offering advice or offering new investments that automatically allocate assets. This will likely result in plans with better performing investments that are more up to date and workers with more realistic expectations of what their plan can provide in retirement. This means the employer, also known as the plan sponsor, acts as a fiduciary on behalf of the employee.
Employers also choose the investment options.
Managing those investments can be one of the most politically charged jobs a plan sponsor has. At the PSCA annual convention last September, a number of benefits managers admitted that it's difficult for them to drop popular funds that aren't performing. A common strategy is for employers to simply add a new fund for that type of investment. There are signs that employers, anticipating that the good years would end, have stepped up their fiduciary efforts. The investment policy statement spells out the criteria a plan sponsor uses to pick funds to offer in a plan.