Four Plan Design Features to Help You Attract and Retain Talent

According to Morgan Stanley at Work’s Plan Sponsor Research Results, plan design is a fast-rising differentiator that’s driving employee enrollment and supporting talent strategy in many companies.

401(k) plans remain a strong essential workplace benefit, as you well know. As plan sponsors see other benefits evolving to meet the more complex scenarios presented by the changing economic climate, they are emphasizing the need for a competitive plan with a range of features to meet the evolving financial needs of a diverse workforce.

So what exactly does that look like? What range of features can make your 401(k) plan stand out among other retirement benefits that might entice your top talent to stick around?

1. The plan design. Employees are more likely to participate when the plan shows evident strategy and thoughtfulness in its design. Features such as match, profit sharing, and Roth encourage enrollment because it allows a participant to feel closer to their entire paycheck.

2. The match amount. If you’re matching 5% or more, you’re going to see significantly higher participation rates. If you’re matching at 3%, it can still feel like a warm benefit. 2% and below feels a little like the company could take it or leave it, and that will be how the participant feels about the benefit—and possibly their long-term status at the company.

3. The auto features. Autoenrollment points them to the benefit. Automatic employer contribution increases the value of the benefit. Automatic escalation raises awareness about the power of savings (and compounding). Automatic re-enrollment reminds them of the benefit in case they waived contributions early on and might like to reconsider after becoming more established in the company.

4. The education. How do you feel about your education program? Do participants have access to an advisor? When there is a financial advisor available and involved, participation goes way up.

Morgan Stanley at Work’s full Plan Sponsor Research Results 2022 is chock full of insightful charts and data that can give you more ideas on how your plan design can boost your attraction and retention rates.

We’d love to hear how you’re feeling about your plan design and how we can work together to make it a stellar part of your talent strategy.

Sources:
https://www.napa-net.org/news-info/daily-news/plan-sponsors-prioritizing-401k-plan-design-part-talent-strategy
https://www.morganstanley.com/content/dam/msdotcom/atwork/pdfs/plan-sponsor-research-results.pdf
Advisory Services offered through The Ascent Group, LLC, an SEC-registered investment adviser. Securities offered through Triad Advisors, LLC, Member FINRA/SIPC. The Ascent Group, LLC; Alera Group, Inc.; Summit Group of Virginia, an Alera Group Company; and Summit Group 401(k) Consulting, an Alera Group Company, are not affiliated with Triad Advisors, LLC. Representatives do not provide tax or legal advice. Please consult with your tax advisor or attorney regarding your situation.  

You are now leaving Summit Group 401(k) Consulting

Summit Group 401(k) Consulting provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by Summit Group 401(k) Consulting, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL