Plan Analytics: Evaluating Your Retirement Plan

Your organization’s retirement plan is a not only a valuable resource for your employees to help achieve their savings goals, but it also serves as a vehicle to attract and retain top talent.

With a myriad of benefits for you, as an employer, and your employees alike, ensuring plan success is crucial. But, what makes for a successful plan? What criteria should a plan sponsor examine to measure plan success?

Plan Analytics to Examine:

Median age, tenure, and savings rates of plan participants

These analytics can be helpful to determine which age groups are not strongly participating and may be encouraged to do so via on-site meetings, targeted emails, and other communication and education. Are your Baby Boomers on track for retirement? At what rate are your Millennials saving?

Participants not contributing sufficiently to receive all eligible employer match

Participants “leaving money on the table” can be studied to explain why contributing to the employer match maximum is so advantageous (e.g., with a 50 percent match, participants automatically earn 50 percent “return” on their contribution before any investment gains occur). What percentage of your contributing employees are not receiving the full match? It’s possible that they aren’t even aware of match or find the match formula difficult to understand.

Participation and savings rates over time

If you look back on the recent previous years, have participation and savings rates increased or decreased? Should any plan design changes be made to help increase these numbers, such as automatic enrollment or automatic increase?

Participants, by age, in each target date fund

Another demographic that can be helped by focused participant communications. Are some participants misusing target date funds? Are there a significant amount of participants in age-inappropriate target date funds?

Participants taking loans

It is important for plan fiduciaries to determine if the plan loan provision is being abused. This can result in significant asset leakage with participants and oversight concerns for plan fiduciaries. Are employees constantly refinancing their loans?

Loan default rates

Loan defaults also create problems for participants (taxation & penalties for premature distributions) and plan fiduciaries (loan defaults at 90 days arrear are a fiduciary breach).

Dollar amounts of employee contributions by type and source

These analytics allow for a deep dive into appropriateness of participant behavior potentially impacting plan menu design decisions, employee investment assistance, Roth utilization, target date fund utilization and more.

Many factors impact the success of your plan. Studying your plan’s analytics helps you improve your plan and ensures your employees reach their retirement goals.

Representatives offer products and services using the following business names: Summit Group of Virginia LLP – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | Ameritas Advisory Services (AAS) – investment advisory services. AIC and AAS are not affiliated with Summit Group of Virginia LLP name. Products and services are limited to residents of states where the representative is registered. This is not an offer of securities in any jurisdiction, nor is it specifically directed to a resident of any jurisdiction. As with any security, request a prospectus from your representative. Read it carefully before you invest or send money. A representative will contact you to provide requested information. Representatives of AIC and AAS do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

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