30TH ANNIVERSARY Each workforce is different-how plans have changed to accommodate an employer's unique needs T he many revisions in regulations that plan sponsors have faced over the past three decades-and the plan design adjustments they have made in response-have generally focused on improving participant outcomes. Whereas the traditional 401(k) worked for a relatively narrow swathe of employers-those large enough to balance highly and non-highly compensated employees-a variety of plan types have arisen to attempt to cover the rest. Retirement plan design now, in fact, addresses much more than retirement saving-today's vehicles offer options ranging from emergency funds to student loan matches to programs for drawing down savings, once the participant no longer works. A major step was creating plans for the small employer. Safe Harbor Plans The Small Business Job Protection Act of 1996 introduced safe harbor plans, which allow plan sponsors to avoid the onerous nondiscrimination testing required with traditional 401(k) plans. In 2021, 45% of plan sponsors had a safe harbor plan, according to the Plan Sponsor Council of America. Its data show that the share of sponsors using a safe harbor plan goes up as the size of the plan goes down. Smaller businesses have embraced safe harbor plans as a reduced-risk plan design that still lets them provide retirement benefits to employees. Forty-nine percent of plans for employers with 50 through 199 employees are safe harbor; this compares with 39% for 14 PLANSPONSOR.COM March - April 2023 Art by OYOWhttp://www.PLANSPONSOR.COM