PLANSPONSOR - April - May 2022 - 24

PLAN DESIGN | PLANSPONSOR BEST IN CLASS 401(k) PLANS
senior vice president, retirement plan services, at Newport Group
in Pittsburgh (see " Leakproof Your Plan, " page 32).
How are best plan design features decided upon by sponsors
and their advisers? They get ushered in as participant needs are
identified-and automatic enrollment is only the start. " We're
hearing more from sponsors about the need for, and interest in,
retirement income solutions, " says Joel Schiffman, head of intermediary
distribution at Schroders in New York City, to cite one
current need.
In-plan options are drawing more attention both because
of 2019's Setting Every Community Up for Retirement
Enhancement Act and plan sponsors' growing preference for
keeping retirees' assets in the plan, says Michelle Richter, executive
director at the Institutional Retirement Income Council in
New York City. Ten years ago, she notes, most sponsors wanted
the opposite.
For example, as of early last year, 74% of large-401(k)-plan
sponsors said they preferred to keep retiree assets in-plan,
up from less than half in 2015, according to the 15th PIMCO
US Defined Contribution Consulting Study.
Richter points to this reversal as " one reason sponsors are
seeing a need to create a retirement tier in their plans. "
How financial wellness programs evolve this year is a crucial
question. Research and Development Strategist Bridget Bearden at
the Employee Benefit Research Institute says, " Financial wellness
benefits have the potential to significantly increase the chances
for retirement success. " According to the 2021 EBRI Financial
Wellbeing Employer Survey, as the wellness programs grow in
value to employees, the expectation that they will be provided will
only increase. The programs also have the potential to address
companies' diversity, equity and inclusion goals, as they focus on
providing customized help in all aspects of individuals' finances.
A simpler-to-implement but important ingredient of a plan is
an investment policy statement, suggests Jon Chambers, managing
director at SageView Advisory Group. Every sponsor should have
one in place, he says, because the Employee Retirement Income
Security Act is a prudence-based statute. An IPS should state what
the plan sponsor hopes to achieve with its investments and direct
the benchmarking of investment performance.
As to benchmarking investment fees, Chambers says, he
tells clients there are different levels of benchmarking. " We try
to do easy benchmarking every quarter against published fees
from fund databases, " he says. The firm performs, and advises, a
more precise benchmarking of fees about once a year.
The 22 plans that qualify this year as Best in Class are on
the following pages. In addition, comparisons of " Best in Class
Plans vs. Other Plans " follow. Like all benchmarks, the standards
for Best in Class change periodically (see " Methodology, " below).
This was also the year that Best in Class designees from 2017
needed to requalify to keep their BIC status. For full profiles of
this year's class, go to plansponsor.com/awards/2022-best-class401k-plans.
-Judy Faust Hartnett
2022 Best in Class 401(k) Plans
Plans Assets <$100mm
Creative Associates International
Explorer Pipeline
Genesee Ceramic Tile Distributors, Inc.
Hyder Construction
The Int'l Association of Lions Clubs
Location
Chevy Chase, Md.
Tulsa, Okla.
Burton, Mich.
Denver, Colo.
Oak Brook, Ill.
Otten Johnson Robinson Neff + Ragonetti Denver, Colo.
Trellis Co.
Van Andel Institute
Verus Advisory
Participants Recordkeeper
212 Ascensus
238 BOK Financial Services
50 Milliman
450 Transamerica
Round Rock, Texas
Grand Rapids, Mich.
Seattle, Wash.
Industry
Real estate
Energy/Utilities/Transportation
Wholesale
52 Principal Financial Group Building/Construction/Contracting
Industry association
77 Principal Financial Group Legal
409 Principal Financial Group Not for profit
634 Empower Retirement
115 Charles Schwab
Life science, research and education
Accounting/CPA firm/Financial planning
METHODOLOGY. The 2022 PLANSPONSOR Best in Class 401(k) plans were selected
from the 2,401 plans whose sponsors responded to the 2021 PLANSPONSOR Defined
Contribution Survey. All were then rated using a proprietary scoring system that weights
usage of more than 30 practices related to plan design, oversight and governance. The variable
scoring system seeks to reward plans for these practices, which are positively correlated
with improved participant and plan outcomes-e.g., plans with immediate vesting receive
the highest score, while plans with one-year vesting schedules receive higher scores than
24 PLANSPONSOR.COM April - May 2022

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PLANSPONSOR - April - May 2022

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