PLANSPONSOR - December 2018/January 2019 - 20

Upfront
Small Plans Can See Big Results
expectations, have moved down-market
in the small business space. These
are streamlining plan administration,
increasing investment diversification
and improving participant outcomes. The
choice to use automatic enrollment and
digital tools is now made by 98% of new
Ascensus clients, for instance.
Irace adds that there is now more
universal usage of target-date funds
(TDFs). " At the end of 2017, we had 25%
of all retirement assets on our platform
invested in target-date funds, versus just
over 3% at the end of 2011. Automatic
feature usage has skyrocketed-our
numbers show auto-features are boosting
retirement outcomes, with an average
participation rate of over 80%, " he says.
Re-enrolling employees who initially
deferred, defaulting participants to a
qualified default investment alternative
(QDIA), and adding an automatic escalation
piece have become more commonplace
in smaller plans, according to
Dan Peluse, director of retirement plan
services at Wintrust Wealth Management.
" This is the best way for plan sponsors to
hit the restart button and redesign their
plan to be most effective. "
Peluse stresses that what allowed
WHILE the defined contribution (DC)
retirement plan system works well for
employees at large companies, workers at
many small companies have encountered
very different savings opportunities. This
has led to legislation that would allow
small employers to group together to offer
multiple-employer plans (MEPs).
Rick Irace, became chief operations
officer (COO) of the Ascensus retirement
division-a recordkeeper that
focuses on small plans-three years ago,
after working for a midsize to large plan
provider for over 20 years. " Many small
businesses I speak with are concerned
that they might need to spend a great deal
of time administering their plan, " he says.
" This is clearly not the case. Financial
advisers and third-party administrators
[TPAs] are helping take away the administrative
burdens that a small business
owner may think he has. "
When asked to compare, from a plan
design perspective, small vs. large retirement
plans, Irace says that, in recent years,
more small businesses have been realizing
the tax benefits of offering a retirement
plan and leveraging benefits to attract good
employees in a competitive market.
He says several design features, and
18 PLANSPONSOR.com December 2018-January 2019
Art by Woshibai
the retirement industry to have more
thoughtful conversations about these
types of design modifications is the data
from plan providers. " Five years ago, our
large plans had success measures readily
available that helped us drive plan design.
There were multiple platforms offered
by providers. Over time, providers have
modified all platforms to look and act
similarly, to allow access to identical data. "
If data is now available to plans of
all sizes, what is the difference between a
small plan and a large plan?
Peluse replies, " I'd say on the surface,
operationally, there isn't much of a difference
anymore. " -Judy Faust Hartnett
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PLANSPONSOR - December 2018/January 2019

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