U.S. retirement plan providers are challenged with record cost troubles, and many are dropping offered benefits or looking to rebalance funding between employers and employees, according to a new BNY Mellon Asset Servicing study.

Plan executives are confident they will either pay now for retirees' benefits or in the future, but it's the issues are how much and interrelated those two costs are and how far the implications will reach, finds the study, which was published in conjunction with research and consulting firm Finadium LLC.

Important study findings include:

• Retirement benefits packages still play an important role in employee hiring and retention. Of the private company executives surveyed, 50 percent say their plans made them more competitive as an employer while 73 percent of public plan executives say their plans were an asset.
• The reduction of funding volatility makes defined contribution plans appealing for employers. Though funding costs for defined contribution may be higher or lower long term than current costs, controlling volatility is seen as an unmatched benefit.
• Hybrid defined benefit and defined contribution plans provide professional management of the defined benefit with the portability of defined contribution. If the employer costs can be successfully managed, some type of hybrid plan could be the best solution for employers as well as employees.
• Executives are turning to their service providers for assistance with some of their most urgent issues, including evaluating private equity and other illiquid assets' performances and outlining new strategies to assure employees a stable retirement.

"Selecting a retirement plan implies not only a financial commitment but also a strategy for ensuring the well-being of tomorrow's retirees," says Josh Galper, managing principal at Finadium. "The plan executives surveyed for this study recognize the importance of this decision, along with the need to do more with less for the good of their employers."