Improvement Opportunity Checklist for DC Plan Sponsors

You should never leave a meeting without specific tasks to follow-up on. One of the key elements of educational programs conducted by TPSU (The Plan Sponsor University) is to end the day with a checklist of opportunities for plan sponsors to improve their plan. That checklist [found here] reviews many ways that 401k and 403b plan sponsors can improve operations, compliance and outcomes.

While education, financial wellness and improving participants outcomes are top of mind for defined contribution (DC) plan sponsors, operations and compliance come first due to increased scrutiny by DOL examiners, new rules and the wave of 401k and 403b lawsuits. Suggestions for improvement on TPSU’s Compliance checklist include:

  • Read plan documents – Most plan sponsors will be surprised what they find especially if documents have not been updated recently.
  • Fiduciary education for the investment or benefits committee – Liability is high but training is minimal.
  • Fee policy statement – Excessive fees are the most common cause of lawsuits.
  • Engaging senior management – Without which plans have a hard time getting necessary resources.
  • Provider and advisor fee benchmarking –How do you know if your fees are reasonable?

Under Plan Optimization, popular improvement opportunities include:

  • Auto features – Includes auto enrollment and escalation under the Ideal Plan reviewed at all TPSU programs.
  • Reduce loans and redo loan policies – Including limiting participants to one loan at a time, six month waiting periods and limiting them to hardship loans only.
  • Restructuring the company match – Auto enrollment, not the match, increases participation but the match greatly affects deferral rates. Many companies are considering stretching the match under the Ideal Plan.
  • Health Savings Accounts (HSAs) – Growing in popularity for high deductible healthcare plans.

Feel free to use TPSU’s Improvement Opportunity checklist to determine what changes you might need to make. But be careful – don’t pick too many or else nothing gets done.

And better yet, come to a TPSU program near you and learn what other organizations are doing to improve their 401k or 403b plans.

Fred Barstein

Fred Barstein

Founder & Editor-in-Chief at 401kTV | TRAU | TPSU
Fred Barstein is the Founder & Editor-in-Chief of 401kTV. Fred is also the Founder and CEO of The Retirement Advisor University (TRAU), a collaboration with UCLA Anderson School of Management Executive Education and The Plan Sponsor University (TPSU).Mr. Barstein was also Founder and Editor-in-Chief of NAPA Net.
Fred Barstein
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