Retirement planning is an increasingly high-stakesendeavor among Human Resources departments today.


Not only is it fraught with compliance and fiduciary landmines,but longer-term employee welfare matters also hang in thebalance.


Your plan design and its parameters play a big rolein your ability to recruit and retain the best and the brightestemployees.


But you also need to constantly evaluate your retirement benefits against a changingworkforce, making sure they reflect features that every demographicin your employ will value – whether automatic enrollment,portability or providing access for retirement and/or financialplanning services.


Your ultimate challenge, though, is the need to ensure that yourretirement benefits do the job of helping today’s employees preparefor tomorrow, because retirement is a growing concern across theboard. Various studies make the point:

  • Some 83 percent of Americans worry over their ability to retiregiven current economic conditions, and 70 percent think it’s harderto retire today than in previous generations, according to theNational Institute on Retirement Security.

  • The Insured Retirement Institute found in 2016 thatonly 24 percent of Baby Boomers are confident they have sufficientsavings to last them through retirement, down from 36 percent in2012.

  • A Transamerica study found that only 12 percent of Gen Xers are confident of a comfortableretirement.

Doing it right means taking a close look at the most importantinfluences over the effective retirement plan design. Amongthem:

  • Investment firm evaluation and benchmarking.There’s a lot of due diligence that goes into your selection of theright investment partner for your plan and your employeepopulation. At least three prospective partners should be vettedand ranked by measures that include fund types, how they’veperformed and fee structures. Also important are the quality andclarity of their employee communications materials and theresponsiveness of their customer service.

  • Forecasting and budgeting. What do youanticipate enrollment in your retirement plan to reach? Have youaccurately gauged interest and likely participation over time basedon employee demographics, eligibility, incentives and education?Having the right – or realistic – expectations and projectingaccordingly will enable you to more precisely budget for yourcontribution matching commitment and avoid expensive surprises.

  • Auto-enrollment and auto-escalation. The morepainlessemployees find the process of enrolling in theiremployer-sponsored retirement plan, the more likely they are toparticipate.

Auto-enrollment should be offered to all employees, not just newones, as they’re all more likely to participate even if given thechoice to opt out.


With auto-escalation, their pre-tax contributions go up a littleeach year in an ordered fashion until they reach their targetsavings rate. Both make it easier for everyone to plan and budgetfor their pre-tax financial commitments.

  • Compliance testing. Contributing to a 401(k)comes with significant tax advantages, but compliance testing withregulations can be daunting. Your eligibility rules andcontribution guidelines must be established and clearly laid out,and testing undertaken (e.g. non-discrimination and limit tests) toensure participation meets the rules and complies with theregulations.

  • Automation features. Online enrollment shouldbe a seamless experience for your workers. Among other things, thismeans that the enrollment pages on the site of your retirementservice provider are linked to the web pages for your core employeebenefit plans.

  • Framing out supplemental plans. It’s alsoimportant to consider and properly frame out any supplemental plansto your main plans. For example, you may want to institute anon-qualified 409(a) deferred compensation plan as anothertax-deferred savings option for certain employees who have maxedout their 401(k) plan.

Between designing a plan that meets everyone’s needs,administering it, ensuring that your employees are consistentlyinformed about their options, and staying on top of compliance,retirement plan administration can be a complicated andtime-consuming effort.


But the payoff is an organization and a workforce that is betterprepared for tomorrow.


Linda Keller is the National COO and Employee BenefitsPractice Leader for Hub International.

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