With millennials being the dominant group in the workforce, it is important for plan sponsors to refocus their goals for a new generation. Here are five ways plan sponsors can refocus their goals for plan significance and success.
Market Your Plan
Plan sponsors are becoming more paternalistic. They are reaching out more to help participants make informed decisions concerning their retirement. Plan sponsors should ask themselves: Is the plan currently being marketed to participants as a valuable component of the company’s employee benefits package? If not, how can we better promote the plan?
Focus on Benefit Adequacy
Participants need to be educated on the truth of retirement planning. Oftentimes participants have expectations that aren’t entirely realistic, including the appropriate deferral percentage. Plan design can be a key element in dealing with this issue (e.g., automatic enrollment, automatic escalation features).
Understand Plan Costs
Plan costs should be readily available, transparent, and meaningful to both plan sponsors and plan participants. Pending final regulations are anticipated to play a major role in ensuring that this happens.
Evaluate Your Target Date Funds*
Don’t get too caught up with returns alone. Consider risk levels, glide paths, and equity/bond exposures before deciding on a target date fund series which best reflect the needs of your participant demographic.
Maximize Plan Design
What’s the goal of this plan? Is it maximizing financially sound retirement experiences for participants? If so, what can you do in pursuit of this goal? Whatever the goal, plan design may be a key ingredient in achieving success (e.g., increase your match, shorten the eligibility period, eliminate loan provisions).
Your plan consultant at Marsh McLennan Agency (MMA) is ready to assist you with all aspects of achieving plan success, from enhancing investment opportunities for participants to protecting plan fiduciaries from liability and loss. Remember, your retirement plan can be a powerful recruiting tool for your company, and it is the one benefit that your employees will utilize throughout their lifetime.
Reach out to an MMA advisor for more information.
*The target date is the date of expected withdrawals at retirement; the fund is not guaranteed at the target date or any other time. These funds are subject to risk, including the loss of principal.
Securities offered through MMA Securities LLC (MMA Securities), member FINRA / SIPC, and a federally registered investment advisor. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Variable insurance products distributed by MMA Securities LLC, CA OK 81142. MMA and MMA Securities are affiliates owned by Marsh & McLennan Companies. MMARetirement.com