In October and November, PLANSPONSOR, for the second year, hosted a road show of half-day events across the country, stopping in Chicago, Boston, New York City,
Dallas and Newport Beach, California.
The event gave plan sponsors and retirement plan advisers who could not to attend the 2017 PLANSPONSOR National
Conference (PSNC) in June the chance to sample some of its
most popular topics. The agenda included a regulatory and
litigation update; a session on best practices in plan design;
panels on innovative fund lineup construction and financial
wellness; and a discussion on new approaches to participant
education and communication.
Speaking about plan design, Spencer Goldstein of Stone
Street Equity noted that, while an automatic enrollment fea-
ture helps participants save, the benefit cannot fully satisfy
their retirement savings needs. Participants saving at the de-
fault rate of 3% aren’t making a conscious decision to do that,
he said. “Most don’t know they should be saving more, while
others can’t save more.”
Goldstein stressed how automatic escalation can help
participants reach a positive outcome in retirement saving—
especially as he believes plan sponsors should implement
that strategy at the maximum level.
Aside from plan design features, both Goldstein and Terry
Dunne, senior vice president, managing director, Millennium
Trust Co., advised sponsors to think “simple” when planning
employee communications. Effective communication strategies begin with simple language and numbers, they said, and
building on these, participants can progress to larger, more
During meetings, “instead of talking for 25 minutes, give
them two to three key [takeaways] they should use for goals,”
Goldstein said. “How much should I have by the time I’m 45
years old for my 401(k) plan?”
When an individual switches jobs—whether willingly or
through termination—human resource (HR) professionals
should provide education, communicating the benefits and
choices he will have, Dunne said.
When contacting terminated and/or missing participants,
communication—with an emphasis on attentiveness—is imperative. Dunne explained that, whether or not a participant
still works for a company, the plan sponsor remains a fiduciary and holds a responsibility for him. “If you’re not communicating well, you can actually be fined by the Department
of Labor [DOL],” he said.
One choice in particular, Dunne stressed, should be considered first: Cashing out of a plan, like taking money out of
retirement savings, can result in hefty taxes and penalties.
When an individual leaves a company and is given a dis-
tribution form explaining what can be done with his retire-
ment plan account, the plan sponsor should not lead the list
of options with a cash-out, he said. Instead, the list should
present options that let the participant keep his savings tax-
advantaged. “The last choice should be cash. There are things
that can be done, but it’s about education, trying to identify
well that the individual has choices.”
Participant education has evolved alongside plan design,
agreed Strategic Retirement Group President David Hinder-
stein. But automatic plan designs do not negate the need for
communications, he said. Plan sponsors “have to think about
what [they]’re trying to focus on with the audience” and bring
those goals to the recordkeeping provider. That firm can gath-
er data about participant demographics for the plan sponsor
to use in targeting communications.
Best of 2017 PLANSPONSOR National Conference events attract
plan sponsors and retirement plan advisers across the country