PLANSPONSOR - September - October 2023 - 27

According to the Bureau of Labor Statics, in January 2022 the
share of wage and salaried workers with a year or less of tenure
with their current employer was 24%. Median employee tenure-
the point at which half of all workers have more tenure and half
have less-for men held, from 2020, at 4.3 years. For women,
median tenure was 3.8 years last January, vs. 3.9 in 2020.
Notably, 80% of plan sponsors offer eligible participants
immediate access to receive matching contributions. Vesting
schedules of more than five years are another " knockout " for
plan sponsors that would aspire to be Best in Class.
Investment Committees Required
While plan governance variables account for 40% of the total
score, another must-have for plans-i.e., those with more than
$5 million in plan assets-to be BIC is an investment committee.
The investment policy statement for a plan optimally serves
as a framework or guide for the plan investment committee to
make investment decisions, says Richard Rausser, senior vice
president at Pentegra in White Plains, New York. " A good IPS
is neither too detailed nor too vague but, rather, gives the plan
officials a framework in which decisions are made without
handcuffing the decisionmaking process. But if an IPS is not
required, why have one? The simple answer is that an IPS can
help control risk and liability. "
Of the many criteria we consider for plan governance, we
Ford Motor Company
Dearborn, Michigan
>$1b | ≥20,000 participants | Automotive: Mfg / Parts
PARTICIPATION RATE:
# OF FUNDS OFFERED:
TRUE-UP MATCH:
ELIGIBILITY:
96%
12
No
MAX EMPLOYER CONTRIBUTION:
MATCH RATE:
Immediate
5%
SYSTEMATIC WITHDRAWALS:
Other strategy
Yes
Investing strategies
College saving
DEFAULT INVESTMENT:
RECORDKEEPER
Yes
Yes
Yes
AVERAGE DEFERRAL RATE:
INVESTMENT REVIEW:
MATCH VESTING PERIOD:
DEFAULT DEFERRAL RATE:
11%
AUTOMATIC ESCALATION RATE:
% RECEIVING FULL MATCH:
FEE EQUALIZATION:
FINANCIAL EDUCATION TOPICS OFFERED
Saving/Budgeting
Quarterly
3 years
5%
1%
≥90%
Not reported
Credit/Debt Management
Tax/Estate planning
Retiree health costs
Yes
Yes
Yes
Target-date fund
Alight
give one to five extra points for plan sponsors utilizing plan
success measures: what they do to evaluate the health of their
retirement plan.
Historically, retirement benefits have been measured by a
set of finite metrics, such as overall participation, contribution
rates and even participant outcomes. But appraising the effectiveness
of a retirement benefit can go beyond this.
John Doyle, senior retirement strategist at Capital Group
in Cockeysville, Maryland, says having measures of success
can help plan sponsors determine what to do to influence
outcomes. He suggests choosing things you can actually influence
through plan design and communications.
According to a " Defined Contribution Investment Perspectives "
report from Capital Group that Doyle co-authored, plan
sponsors can look at the average deferral rate by age cohort,
tenure and compensation. They should also determine how
many participants fall below the goal percentage. He says sponsors
can use the average for their industry as a benchmark for
participation rate or deferral rates; however, each plan sponsor
could set its own objective. Doyle also recommends measuring
participants' personalized rate of return. " How participants
invest is going to affect retirement outcomes, but, even if your
plan has the best investments, if participants don't know how
to use them or are using them incorrectly, they may not be
succeeding, " he says. -Judy Faust Hartnett
Gannett Fleming
Camp Hill, Pennsylvania
>$200mm - $500mm | 1,000 - 4,999 participants | Engineering
PARTICIPATION RATE:
# OF FUNDS OFFERED:
TRUE-UP MATCH:
ELIGIBILITY:
94%
18
Yes
MAX EMPLOYER CONTRIBUTION:
MATCH RATE:
Immediate
3%
SYSTEMATIC WITHDRAWALS:
50% of 6%
Yes
Investing strategies
College saving
DEFAULT INVESTMENT:
RECORDKEEPER:
Yes
Yes
No
AVERAGE DEFERRAL RATE:
INVESTMENT REVIEW:
MATCH VESTING PERIOD:
DEFAULT DEFERRAL RATE:
10%
AUTOMATIC ESCALATION RATE:
% RECEIVING FULL MATCH:
FEE EQUALIZATION:
FINANCIAL EDUCATION TOPICS OFFERED
Saving/Budgeting
Quarterly
2 years
6%
1%
≥75%
Yes
Credit/Debt Management
Tax/Estate planning
Retiree health costs
Yes
No
No
Target-date fund
Schwab Retirement Plan Services
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PLANSPONSOR - September - October 2023

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