PLANSPONSOR - October/November 2020 - 12
UPFRONT
Re-Enrollment in 2021-or Not
RETIREMENT plans preparing for a
re-enrollment next year have more to
consider than usual, due to COVID-19.
First, says Stan Milovancev, an executive
vice president at CBIZ Retirement Plan
Services, " If you happen to be one of those
organizations where your business is
up, where you're hiring more people and
workers are doing well, then a re-enrollment
might be the perfect thing, " he says.
" But if you've had furloughs and if people
were let go or business was down, those
things would make me cautious. "
While re-enrollments are less common
than automatic enrollment or automatic
escalation, they can improve participation,
savings rates and asset allocation,
says Melissa Elbert, a partner at Aon. " It
can be a great way to bring longer-tenured
employees into the plan and, by moving
everyone to an age-appropriate asset allocation,
improve overall diversification. "
Auto-enrollment works. Michael
Knowling, head of client relations and
business development at Prudential,
points to his company's research showing
55% of plans use auto-enrollment, and just
5% of those plans' participants opt out.
Yet, if the pandemic has caused
someone financial hardship, asking
him to defer more could be a tough sell,
Milovancev says. Even if a company and its
workers have restabilized after enduring a
rocky period, it might be worth delaying a
re-enrollment until 2022, he says.
Plan sponsors that want to modify
existing investment choices without doing
a full sweep into the qualified default
investment alternative (QDIA) do have
options, says Elbert. Employers can run
a " quick enrollment " campaign, whereby
employees enroll in the QDIA, at the
default rate, via checking a box.
Before a re-enrollment, ensure the
12 PLANSPONSOR.COM October - November 2020
Art by Julien Posture
plan document allows for one, or amend
it to do so, Elbert says. Employers must
give ample notice to participants before the
re-enrollment and must make sure that
what the default will entail and the person's
ability to opt out are clear, she adds.
Generally, this can be 30 to 60 days
before the re-enrollment, but, considering
the current distractions, Milovancev
recommends 60 to 90 days, with notices
sent at 90, 60 and seven days beforehand.
" You'll want people to have every chance
to have selected the right investments and
deferral rates for them. "
Elbert says, from a fiduciary perspective,
sponsors should address any potential
problems. For instance, if the plan
has missing participants, the sponsor
should try to locate them and document
its process. Company stock in the plan
can also create unique challenges, she
adds. -Amanda Umpierrez
http://www.PLANSPONSOR.COM
PLANSPONSOR - October/November 2020
Table of Contents for the Digital Edition of PLANSPONSOR - October/November 2020
Time to Take Stock
2020 DC Survey: Plan Benchmarking
Dangers of Debt
Everyone Has a Stake
ESG Across Asset Classes
'Onboard' Education
PLANSPONSOR - October/November 2020 - Cover1
PLANSPONSOR - October/November 2020 - Cover2
PLANSPONSOR - October/November 2020 - 1
PLANSPONSOR - October/November 2020 - 2
PLANSPONSOR - October/November 2020 - 3
PLANSPONSOR - October/November 2020 - 4
PLANSPONSOR - October/November 2020 - 5
PLANSPONSOR - October/November 2020 - 6
PLANSPONSOR - October/November 2020 - 7
PLANSPONSOR - October/November 2020 - 8
PLANSPONSOR - October/November 2020 - 9
PLANSPONSOR - October/November 2020 - 10
PLANSPONSOR - October/November 2020 - 11
PLANSPONSOR - October/November 2020 - 12
PLANSPONSOR - October/November 2020 - 13
PLANSPONSOR - October/November 2020 - 14
PLANSPONSOR - October/November 2020 - 15
PLANSPONSOR - October/November 2020 - Time to Take Stock
PLANSPONSOR - October/November 2020 - 17
PLANSPONSOR - October/November 2020 - 18
PLANSPONSOR - October/November 2020 - 19
PLANSPONSOR - October/November 2020 - 2020 DC Survey: Plan Benchmarking
PLANSPONSOR - October/November 2020 - 21
PLANSPONSOR - October/November 2020 - 22
PLANSPONSOR - October/November 2020 - 23
PLANSPONSOR - October/November 2020 - 24
PLANSPONSOR - October/November 2020 - 25
PLANSPONSOR - October/November 2020 - 26
PLANSPONSOR - October/November 2020 - 27
PLANSPONSOR - October/November 2020 - Dangers of Debt
PLANSPONSOR - October/November 2020 - 29
PLANSPONSOR - October/November 2020 - Everyone Has a Stake
PLANSPONSOR - October/November 2020 - 31
PLANSPONSOR - October/November 2020 - ESG Across Asset Classes
PLANSPONSOR - October/November 2020 - 33
PLANSPONSOR - October/November 2020 - 'Onboard' Education
PLANSPONSOR - October/November 2020 - 35
PLANSPONSOR - October/November 2020 - 36
PLANSPONSOR - October/November 2020 - 37
PLANSPONSOR - October/November 2020 - 38
PLANSPONSOR - October/November 2020 - 39
PLANSPONSOR - October/November 2020 - 40
PLANSPONSOR - October/November 2020 - Cover3
PLANSPONSOR - October/November 2020 - Cover4
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