Designing Plans to Meet Retirement Goals
- May 27, 2019
- Posted by: Colleen
- Category: Financial Plan, Resources
Two of the elements of Designing a Retirement Plan Standard of Excellence are designing a plan to meet the Plan Sponsor’s mission or goals and objectives and designing a plan to assist and inspire participants in meeting their retirement goals. The attached article from the Defined Contribution Institutional Investment Association (DCIIA) provides some interesting statistics and strategies Plan Sponsors have implemented, or are considering implementing to accomplish these goals. The following is an excerpt from the article.
“In the past, DCIIA has identified four core best practices that plan sponsors could take to improve the performance of their plans and those practices still remain valid today. They are:
- Automatically enrolling new hires, and periodically conducting auto enrollment sweeps of non-participating employees
- Setting a higher default contribution rate appropriate for your plan
- Changing plan-matching formulas to “stretch” the match benefit in order to “nudge” employees to adopt better savings behaviors
- Implementing automatic contribution escalation as a default, and increasing savings until the ideal rate is achieved”
Check out the whole article to see how you can apply these best practices to your plan today.