The key point in your benefit plan’s success is in its design. And if your company hasn’t thought much about it, it might be the time for you to consider a thorough analysis to see how well your current plan is designed. There is no such thing as a universal plan design, as there are many different configurations and types, based on a wide range of factors and demands.
According to a recent Forbes article, all of the high-performing plans in their survey had the following key plan characteristics in common:
- High participation rates: Nearly all employees were involved the best performing plans (95%) while other plans had less than 80%.
- Smart investment options: Almost all of these plans offer cheap index funds, managed accounts, and Roth options.
- Auto-enrollment and auto-contributions: The best plans have automatically enrolled employees in their plan
- Financial education offering: The majority of companies nowadays provide their employees with a financial wellness programs in addition to their plan design. Plus, more than a half provided advice on college credit, savings, and debt management.
According to Forbes, you should definitely consider the following actions:
- Refer to a low-cost provider for an advice, in order to get additional help in building features into your 401(k) plan design.
- Check all the investment options in your retirement plan in terms of fees. As a fiduciary you are responsible for the paid fees and fund selection.
- Ask for advice: get as much information on your retirement plan design as you can. Check the most recent information with your service providers.