Building Better Benefits via a Better 401(k) Plan
Plan Sponsors who take a different view of their 401(k) Plan will see benefits accruing to the company as well as to the plan participants. When looking at whether or not to offer Auto Enrollment most employers analyze the dollar amount that an employer will spend to fund such a benefit. The natural tendency is to view the expenditure while ignoring the benefit that returns to the sponsoring company. A recently released writing tells us that focusing exclusively on the expenses may not be in the best interest of all parties since it fails to tell the entire story.
After providing over 150 Fiduciary Training Programs throughout the country as The Plan Sponsor University (TPSU), there is a shared sentiment among all parties – as the plan participant wins, the plan sponsor wins also! This month, The Defined Contribution Institutional Investment Association has published an article titled, Automatic Plan Features in Defined Contribution Plans: What’s in it for the Plan Sponsors?
Some of the key benefits to the employer include:
- improved employee satisfaction and engagement;
- the ability to negotiate lower asset management fees;
- lower recordkeeping fees; and
- stimulating greater plan participation.
The article delves into four main areas when answering the question “What’s in it for the Plan Sponsors?” Employers who consider Auto Enrollment features should always look at the entire-picture and study:
- Workforce Planning;
- Employee Satisfaction and Engagement;
- Financial Performance; and
- Associated Expense.
The writing also lists multiple case studies where the reader benefits by learning what other plan sponsors have analyzed, surmised and how they have capitalized on the opportunities within their reach, three case study recommendations and a well defined “roadmap” for the implementation of change within a plan.
Plan sponsors wanting additional information can obtain more details on the Auto-feature topics cited within the article.
