Effective retirement plan implementation: Design, Administration, Accountability

From left to right: Fidel Baca, Piers Hurley, Rick Amstutz, Karen Soefje.

Taking the first steps to providing an effective retirement plan can be daunting for HR and Finance teams. First there’s the worry over designing a plan that benefits all employees, but then the concern with properly administering that plan and adhering to the rules through the use of strong audit practices. In an effort to continue to provide value and thought leadership to our clients and partners, ExponentHR alongside Montgomery Coscia Greilich, and UBS Financial Services presented a panel to discuss best practices for implementing efficient and effective retirement plans for organizations with varying complexity.

Stay informed about legislative changes

Like many aspects of a business, retirement plans, and 401(k)’s specifically, are subject to constant reform. Before you design a plan or make any changes to an existing plan, proactively consult your advisors to stay on top of new and upcoming changes.

So what changes can we expect from the latest tax reform? Many expected that the latest tax bill would do away with non-qualified plans, or change 401(k) dollars to post-tax instead of pre-tax, but fortunately those pieces were removed and shelved for future debate. Aside from the continuation of investment limit increases, not much else has changed. 401(k) remains relatively untouched for now, however, it’s still important to keep the line of communication open with your plan administrator and service providers to prepare your organization for any changes to come.

Increasing participation through automatic enrollment

Each employee is unique, and sometimes organizations require complex plans to meet their needs but you shouldn’t be afraid to implement complex solutions. However, it’s hard to quantify the value of a plan if participation is low. Increase participation in your plan by activating an Automatic Enrollment strategy. HR departments are often hesitant to implement automatic enrollment in their organizations for fear that employees will be displeased, but in most cases employees are thankful for the simplified process and help with setting up their financial well-being.

If your organization chooses to go the automatic/re-enrollment route, it’s important to provide employees with the required notifications, education, and the ability to opt out. You can accomplish this through a competent technology platform that allows you to automate the process and receive and track opt-outs as well as automate the complex rules for those that remain opted in.

The more complex, the better.

Complex plans allow you to address your entire organization. There is no need to simplify your design in fear of not being able to administer correctly. A knowledgeable advisor, with the help of technology, can meet your plan expectations. In order to manage the complexity it’s becoming more common to hold regular administration calls outside of committee meetings to ensure that your complex plans are being adhered to and audited appropriately.

Use your partners.

Surround yourself with strong partners that support you and your team from a good advisor partner that can help guide you the through plan design, to a robust tool to help you administer the plan through the use of technology, and finally a strong audit partner that can help you adhere to your unique plan design.

A special thank you to our valued partners and panelists Piers Hurley, Karen Soefje, Rick Amstutz, and Moderator Fidel Baca for their leadership and guidance!

Contact Us if you have any questions about this topic or visit our Events page to RSVP to upcoming events.

Meg Gardner
Meg Gardner

Meg oversees Alliance relations in addition to managing events at ExponentHR.