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Plan Design

Automatic plan features can have an enormous impact on workers’ retirement income and can significantly boost participants’ chances of meeting retirement goals. But their success depends on how plan sponsors implement these features within their DC plan.
J.P. Morgan Asset Management, “Searching for Direction on the Journey to Retirement”, 2013

Plan Design assessment is the first step toward improving Plan Health. Making design decisions requires a strategic assessment of employee behavior and budgetary concerns. Thoughtful and purposeful decisions lead to the development of a robust chassis on which all other plan aspects can run.

Challenge Plan Design Solution Benefit
Poor Participation “E-Z Enroll” Improved Participation
Low Deferral Rates “Stretch Match” Better Match Utilization
Stagnant Deferral Rates “Step Up” Ongoing Savings Improvement
Insufficient Overall Savings “Simple 10” Increased Overall Savings

The implementation of some or all of these solutions increases participation, provides greater incentive for participants to save at higher rates, and simply makes saving easier. Those positive impacts lead to greater plan growth, which creates cost efficiencies in better vendor pricing.

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