If you have been in the retirement business for a while, youknow the industry constantly changes. At times, those changes causeplan sponsors and their advisors to shift focus in order to improvetheir plans. From fiduciary, funds and fees to savings andparticipation rates, there have been plenty of important issues toaddress.


Certainly, those issues have been and continue to be veryimportant, but what is the real purpose you and your clients shouldbe striving for? The spotlight is now on outcomes, commonlyreferred to as retirement readiness. That’s great progress, in myopinion.


We’re seeing how simple changes in plan design can make atremendous difference in plan participants’ levels of retirementreadiness. To help get participants on track, we generallyrecommend:

  • Automatic enrollment with at least 6% electivedeferral

  • Automatic escalation of at least 1% per year up to 10%

  • Sweeping all existing employees into the plan at least one timeat the default deferral rate

  • Stretching the match by using a formula that incents employeesto defer at higher levels in order to get the full employermatch

  • Using an asset allocation option as the qualified defaultinvestment alternative (QDIA)

This shift to a focus on retirement readiness offers you a greatopportunity. After all, a lot of financial professionals stillfocus primarily on investment strategies and due diligence. Settingyourself up as the results-focused, retirement readiness expertcould be a powerful way to differentiate yourself from yourcompetition.


Consider these steps to integrate retirement readiness into yourpractice:

  1. Get in thedoor. Evaluate your block anddetermine which plan sponsors to target first. Start with thoseplan sponsors who are concerned about improving their plans(eventually, though, you should have this conversation with all ofyour clients).

Taking time up-front to gather plan and participant level datacan help you evaluate the plan, make smarter recommendations andget an edge over the competition. We’re working on a new plananalyzer app to make it easier and faster for advisors to giveclients hard data on how specific plan-level changes could impacttheir percentage of employees on track for retirement.

  1. Engage inconversation. Help plan sponsorsunderstand the impact improved participant outcomes can have ontheir bottom line. Now is the time to illustrate the positiveimpact simple plan design changes can make not only on theirparticipants’ retirement readiness — but also their organization'sbottom line.
  2. Make a recommendation. Use the data fromplan evaluations and assessments to create outcome-based plandesign recommendations tailored to each plan sponsor’s uniqueneeds.
  3. Follow up and add value. Provide ongoingeducation to reinforce the importance of participant outcomes.Encourage ongoing reviews and create a plan to stay in front ofyour clients with fresh, retirement readiness-focusedtopics.

Now is the time


Plan sponsors and participants need your help to make theprogress that’s clearly needed. By diving deeper into planevaluation and making outcome-based plan design recommendations,you can build a stronger practice and create a loyal following ofhighly satisfied clients.

Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.

  • Critical BenefitsPRO information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.