PLANSPONSOR - September - October 2023 - 2

Role Models
INSIGHTS
PUBLISHER: Alison Cooke Mintzer
alison.mintzer@issmediasolutions.com
A
t PLANSPONSOR, we've honored retirement plans in a quantitative and qualitative
way for many years. We know that, as important as the plan is-and
your fiduciary role too-there can be more pressing issues. In fact, a few years
back when we asked plan sponsor attendees of the PLANSPONSOR National Conference
where the retirement plan ranked on their list of daily concerns, it was not in the top five.
(Though at least it broke the top 10!) The day-to-day responsibilities for many of you, to
keep either the human resources department or the finance department running, outweigh
the retirement plan. That's why we take the time to make sure stories get told and
plans that excel are profiled.
Our Plan Sponsors of the Year, which were covered in the previous issue, are part
of a large, qualitative program. We know their stories. We get to read long-form nominations
from passionate providers and advisers; we see the sponsors' detailed entries that
describe their struggles and successes. We have context about their industry and workforce
and understand why sometimes what may look to outsiders like suboptimal metrics
are truly superior outcomes.
On the other hand, to be one of our Best in Class plans, which are listed in this issue,
is to be a " blind metric, " if you will. The score doesn't know much about the workforce-are
the employees hourly or salaried? Are there unique challenges in the company's industry?
Not all of these things can be considered when we look at plans for Best in Class contention.
What we do know is that these plans have both exceptional administrative elements
and plan design, which are industry hallmarks of a strong plan, and stand out for their
exemplary best practices. " Best in class " is generally defined as the superior members of
a category-and these plans are numerically superior.
As in the past eight years, we have selected the group from the 401(k)s whose sponsors
completed the latest annual PLANSPONSOR Defined Contribution Survey. To be
considered, the plan has to first pass what we've affectionately dubbed the " knockout
round. " To survive, plans must have: an investment policy statement, automatic escalation,
some sort of employer contribution to the plan, full vesting of five years or less and,
if a plan is greater than $5 million, an investment committee.
After passing the knockout round, each plan can score up to 100 points: 75 from plan
design components and 25 for oversight elements. Any plan that meets our passing grade
is awarded Best in Class. The formula evolves and changes each year. For example, this
year, plans can " earn " a point if the design includes some sort of link to student loan repayment.
This recognizes the fact that, as is covered by PLANSPONSOR reporters, this is an
emerging area of innovation and best practices.
We're aware that our criteria often expose a number of tradeoffs that companies make
in plan design. We know, for example, from some anecdotal evidence in our Plan Sponsor
of the Year program, that when a company increases employer contributions, it may also
decide to add a little tenure to its vesting, linking the dollars to retention efforts. Therefore,
the scoring is additive; plans aren't losing points because they don't have or aren't doing
something. To be Best in Class doesn't mean that everything is right-it means that the
sum of the parts that are there is great.
I hope those of you trying to improve your plan look to our awards programs as a source
of guidance. We know that all sponsors struggle with defining success and setting goals that
also reflect their organization's goals and participant demographics. At PLANSPONSOR,
we strive to bring you people and plans that are reaching success and providing hope that
you and your plan can do that too. -Alison Mintzer, Publisher
2 PLANSPONSOR.COM September - October 2023
Photo by Matt Kalinowski
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EXECUTIVE EDITOR, PLANSPONSOR.COM:
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EDITORIAL STAFF: Natalie Lin, Paul Mulholland,
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PLANSPONSOR - September - October 2023

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