PLANSPONSOR - October/November 2019 - 20

Upfront
Diversity Enlarges the Committee's View
He adds that a 2016 McKinsey
and Co. study found that a corporate
team is 157% more likely to understand
its consumers when at least one team
member is from their demographic
group. With retirement plan committees,
the consumers are plan participants.
Gordon Tewell, a principal at Innovest
Portfolio Solutions, says traditionally, plan
committees comprised C-level employees
from the HR and finance departments
and represented older workers, but there
are now more younger workers.
" If committee members are all
C-level, highly paid, older employees, they
won't understand the pain of participants
who live paycheck to paycheck and what it
means to be an employee who wants to be
in the plan but can't defer, or defer at the
level he'd like, " Tewell says.
For consultants, a C-suite committee
is also the most challenging to work with,
he adds. " They're so busy, and we want to
meet regularly, " he says.
" If a large portion of the workforce
is Millennials, plan sponsors will want
to have at least one Millennial on the
committee, who will better understand
that demographic group's saving needs, "
McCarthy says.
He says it is hard for a committee
TODAY'S companies are becoming more
diverse both generationally and culturally,
and retirement plan committees would do
well to reflect this trend. Diversity comes
in many forms. Gender, race, religion,
age, culture, socioeconomic background,
education and functional expertise each
lend a unique perspective, which, says a
Nuveen e-newsletter, has something to
contribute in plan decisionmaking.
Brendan McCarthy, national sales
director, DCIO [defined contribution
investment only] at Nuveen, says once a
plan sponsor comprehends its fiduciary
responsibility to its participants, and the
risks it faces, it should be able to build a
highly effective committee. This would
have an appropriate number of members,
and representative demographics.
" Committees will have representatives
from the HR [human resources], finance
and legal departments, but it's important to
have diversity in the committee representative
of the retirement plan participants. A
diverse committee will have better governance
practices, " McCarthy says.
20 PLANSPONSOR.com October - November 2019
Art by Hye Jin Chung
of all 50-year-old white males to understand
how Millennials or different races
view their retirement savings needs and
what appeals to them. Having someone
from those latter demographics on the
committee can give that perspective.
" They can especially help with how
different demographics view education
and communication, which is usually
designed or approved by the retirement
plan committee, " McCarthy points out.
Innovest has been seeing good diversity
on committees: active employees and
retirees, males and females, and executives
as well as staff. -Rebecca Moore
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PLANSPONSOR - October/November 2019

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