PLANSPONSOR - April - May 2022 - 22
PLAN DESIGN | PLANSPONSOR BEST IN CLASS 401(k) PLANS
Much more than just
'auto'-features go into building
a Best in Class plan
W
hat makes a 401(k) plan " Best in Class " ? There is no set
standard that plans can aim for but a moving target, in
sync with the changing environment in which plans
operate. What recipients of the PLANSPONSOR Best in Class
401(k) designation have in common are operational strength,
provision of features and investment options that allow participants
to accumulate sufficient retirement assets.
A recent study, " Alight 2022 Universe Benchmarks: How
workers are saving and investing in defined contribution plans, "
finds that, when it came to saving for their retirement, workers
stayed steadfast throughout the COVID-19 pandemic. DC plan
participation increased last year across almost every key performance
indicator, Alight's research shows.
The 2021 PLANSPONSOR Defined Contribution Survey
found that the average plan participation rate was 78%, similar
to 79% in 2020, while the average contribution rate increased to
7.3% from 7.1% in 2020. The average plan balance was $117,000
last year; in 2020, the average was $103,000. Experts note that a
high participation rate likely represents a combination of several
Best in Class practices such as automatic enrollment with an
appropriate deferral rate, deferral escalation, one-on-one adviser
advice and good communication.
DC plans with participants who owe money to their account
were at record lows, says the Alight survey: Just 19% of participants
last year had an outstanding loan-the least since Alight
began tracking in 2000-whereas the percentage was near 30% a
decade ago. Retirement plan hardship withdrawals also decreased
last year, when 5% of retirement plan participants took money out.
That low number may indicate participants took pandemic-related
withdrawals and distributions earlier, due to provisions of the
Coronavirus Aid, Relief and Economic Security in 2020.
To stop up leakage, plan sponsors that have not yet done so
might consider letting exiting employees continue repaying their
loans, from either a bank checking or bank savings account; this
is typically facilitated by the plan recordkeeper. This provision
has tended to be more common across larger plans, but the trend
is growing and is worth thinking about, says Sherri Painter,
22 PLANSPONSOR.COM April - May 2022
Art by Georgie McAusland
http://www.PLANSPONSOR.COM
PLANSPONSOR - April - May 2022
Table of Contents for the Digital Edition of PLANSPONSOR - April - May 2022
INSIGHTS
INDUSTRY ANALYSIS
RULES & REGULATIONS
UPFRONT
The DE&I Lens
By Design
Things People Do
Leakproof Your Plan
The ESG Decision
When Retirees Stay in the Plan
PLANSPONSOR - April - May 2022 - Cover1
PLANSPONSOR - April - May 2022 - CT1
PLANSPONSOR - April - May 2022 - CT2
PLANSPONSOR - April - May 2022 - Cover2
PLANSPONSOR - April - May 2022 - 1
PLANSPONSOR - April - May 2022 - INSIGHTS
PLANSPONSOR - April - May 2022 - 3
PLANSPONSOR - April - May 2022 - INDUSTRY ANALYSIS
PLANSPONSOR - April - May 2022 - 5
PLANSPONSOR - April - May 2022 - RULES & REGULATIONS
PLANSPONSOR - April - May 2022 - 7
PLANSPONSOR - April - May 2022 - 8
PLANSPONSOR - April - May 2022 - 9
PLANSPONSOR - April - May 2022 - UPFRONT
PLANSPONSOR - April - May 2022 - 11
PLANSPONSOR - April - May 2022 - 12
PLANSPONSOR - April - May 2022 - 13
PLANSPONSOR - April - May 2022 - 14
PLANSPONSOR - April - May 2022 - 15
PLANSPONSOR - April - May 2022 - 16
PLANSPONSOR - April - May 2022 - 17
PLANSPONSOR - April - May 2022 - The DE&I Lens
PLANSPONSOR - April - May 2022 - 19
PLANSPONSOR - April - May 2022 - 20
PLANSPONSOR - April - May 2022 - 21
PLANSPONSOR - April - May 2022 - By Design
PLANSPONSOR - April - May 2022 - 23
PLANSPONSOR - April - May 2022 - 24
PLANSPONSOR - April - May 2022 - 25
PLANSPONSOR - April - May 2022 - 26
PLANSPONSOR - April - May 2022 - 27
PLANSPONSOR - April - May 2022 - Things People Do
PLANSPONSOR - April - May 2022 - 29
PLANSPONSOR - April - May 2022 - 30
PLANSPONSOR - April - May 2022 - 31
PLANSPONSOR - April - May 2022 - Leakproof Your Plan
PLANSPONSOR - April - May 2022 - 33
PLANSPONSOR - April - May 2022 - The ESG Decision
PLANSPONSOR - April - May 2022 - 35
PLANSPONSOR - April - May 2022 - When Retirees Stay in the Plan
PLANSPONSOR - April - May 2022 - 37
PLANSPONSOR - April - May 2022 - 38
PLANSPONSOR - April - May 2022 - 39
PLANSPONSOR - April - May 2022 - 40
PLANSPONSOR - April - May 2022 - Cover3
PLANSPONSOR - April - May 2022 - Cover4
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https://www.plansponsordigital.com/plansponsor/january_february_2024
https://www.plansponsordigital.com/plansponsor/november_december_2023
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https://www.plansponsordigital.com/plansponsor/may_june_2023
https://www.plansponsordigital.com/plansponsor/march_april_2023
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https://www.plansponsordigital.com/plansponsor/february_march_2022
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https://www.plansponsordigital.com/plansponsor/october_november_2021
https://www.plansponsordigital.com/plansponsor/august_september_2021
https://www.plansponsordigital.com/plansponsor/june_july_2021
https://www.plansponsordigital.com/plansponsor/april-may_2021
https://www.plansponsordigital.com/plansponsor/february-march_2021
https://www.plansponsordigital.com/plansponsor/december-january_2021
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https://www.plansponsordigital.com/plansponsor/october-november_2019
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https://www.plansponsordigital.com/plansponsor/april-may_2019
https://www.plansponsordigital.com/plansponsor/february-march_2019
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https://www.plansponsordigital.com/plansponsor/april-may_2018
https://www.plansponsordigital.com/plansponsor/february-march_2018
https://www.plansponsordigital.com/plansponsor/december_2017-january_2018
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