Reviewing Retirement Plans May Help Increase New Hires
As the year progresses, it is a good idea for employers to review their 401(k) plans and make any necessary adjustments to ensure they are providing the most beneficial options for their employees.
One important aspect to consider is how companies can utilize retirement plans as a tool to retain talent in today’s competitive job market. Companies are recognizing that offering attractive retirement benefits not only provides financial security for their employees but also serves as a powerful incentive for talent acquisition and retention. By offering robust retirement plans, including options such as 401(k) contributions, profit-sharing, student loan repayment and matching programs, employers can demonstrate their commitment to their employees’ long-term financial well-being.
At the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held at UCLA, in Los Angeles, CA, Fred Barstein spoke with Adjunct Lecturer Rick Unser, Partner & Managing Director for Creative Planning Retirement Services, one of the largest Defined Contribution consulting firms in California. Rick discusses his plans for the upcoming program in October, where Rick will again, lecture. The program will focus on 401(k) decisions and the different aspects that plan sponsors need to consider. He highlights the two main themes: process and fiduciary-oriented decisions, and business-related decisions. One of the business-related decisions he mentions is using retirement plans to recruit and retain talent. He suggests having a panel discussion with financial buyers, CFOs, HR leaders, and legal resources to explore options such as increasing the match, starting a deferred compensation plan, or investing in employee education. The conversation also touches on the impact of the war for talent and low unemployment rates on 401(k) plans, as well as the potential role of provisions like student loan debt repayment in SECURE 2.0. Rick notes the enthusiasm within the industry for such provisions, but a lack of matching enthusiasm from employers.
Read the Full Transcript Here:
Fred Barstein:
Greetings. This is Fred Barstein, CEO and founder of TPSU at UCLA, where we’re in the middle of conducting a TPSU program with our Adjunct Lecturer Rick Unser, managing director at Creative Planning. Welcome Rick.
Rick Unser:
Thank you, Fred.
Fred Barstein:
Okay if we ask you a few questions?
Rick Unser:
Absolutely.
Fred Barstein:
Before we start, Rick is, as I said, the managing director of Creative Planning here in Southern California. Creative Planning is one of the largest defined-contribution consulting firms, and Rick, located here, covers this whole territory. He’s also a Forbes Contributor. And he does industry-wide, famous 401(k) Fridays Podcast with industry leading thought leaders.
So Rick, going through this program, I know this is your first time, you had some ideas about what you want to do for your next program which is scheduled for October.
Rick Unser:
Yeah, October seems to be the time of year where companies are making decisions about their 401(k) plans, so we thought, why not orient the theme of the next program to what it’s like to make 401(k) decisions? So thinking about splitting that into two different camps, one being talking about, okay, well, there are process and fiduciary oriented decisions that people need to make around, whether it be going to RFP or conducting benchmarking or reviewing their investment lineups or changing out members of their 401(k) committee, whatever it might be. There’s a lot of decisions on that end that I think are really good to help people understand and appreciate that are more, let’s call it blocking and tackling.
And then, I think, there’s more business related decisions that, quite frankly, I don’t know that a lot of plan sponsors really know where to think or where to start if they want to tackle it.
A big thing that we’re seeing out in the marketplace right now, as an example, is, “Hey, we want to recruit and retain talent, and how can we use our retirement plan to do that?” And one of the things that naturally comes up is, “Well, we feel like we need to contribute more money towards our match. Well, how would I go about doing that?” And the idea here would be that we would have a panel that would be a great resource for attendees to run that concept. [inaudible 00:02:34].
So have a financial buyer, a CFO, have a HR leader, have a general counsel or legal resource, and just have them walk through various decisions of, “If we wanted to increase our match, how would you like us to engage you to get a good outcome from that type of decision? Or should we start a deferred compensation plan? Or we’re thinking about doing something differently around employee education and we want to invest in that, whatever it might be. Just kind of thinking, having resources for people to almost have a little role play on how to maybe get the best outcome from things that they’re thinking about doing differently in 2024.
Fred Barstein:
And are you seeing that the war for talent and this low unemployment rate is affecting how people are looking at their 401(k) or 403(b) plan?
Rick Unser:
Yes and no. I think companies are looking at their 401(k) plans very similarly that it’s a valuable part of their benefit. I think what a lot of people are trying to think about in this war for talent is what else can I be doing for people as part of an overall retirement benefit and looking at different avenues, some of those might be provisions within SECURE 2.0, some of those might be providing deeper or newer resources to help support their employees, some of that could be revisiting decisions that they’d made years ago around the company match or the plan design and trying to make sure that that’s contemporary, doing a benchmarking study or plan design analysis against some of their top competitors for talent.
I don’t think that people are necessarily, completely trying to, let’s call it flip the couch over and start over with 401(k), but I think they’re definitely looking at the retirement piece of their benefits offering and saying, “Are we pushing all the buttons and throwing all the levers that we can and that makes sense for us based on the type of talent that we’re trying to attract and retain?”
Fred Barstein:
And to your point, in SECURE 2.0, for example, student loan debt repayment is a very tangible, it may not have anything to do with retirement, but it affects how you can save and how much you can save. Well-
Rick Unser:
And on that note, with student loan debt, that’s one that I feel like we as in industry are super excited about, I’m not getting that same level of excitement from employers. And I don’t know if that’s an education that we need to be doing a better job as an industry of, or whether that’s a just not familiar with it, not wanting to be the proverbial first one in the boat, but I do think there’s a little disconnect there around, we think this is great in a lot of ways, and I mean, obviously, not everybody, but there’s a lot of excitement and enthusiasm about that, but I don’t know that employers are matching that right enthusiasm that some of the industry has.
Fred Barstein:
We have heard though, anecdotally, that it’s a great engagement tool, so that the employees that are effective, and it could be older ones who are paying off their kids.
Rick Unser:
Sure.
Fred Barstein:
Well, that’s great. Well, we look forward to seeing you in October, and hopefully, if you’re in the Southern California area, you’ll be able to join our next T PSU program, which will be, as I said, middle of October. On that, thanks Rick for participating and supporting TPSU.
Rick Unser:
Yep. Thank you, Fred. It’s been a great program.
Fred Barstein:
And thank you for watching 401kTV. Please, stay tuned
