Retirement plan success: From good to great

The most popular measurement of 401(k) plan success is participation rate. We consider a high participation rate to be 90% or better. While participate rate is a good first step, it is only one of many ways to measure. Take your 401(k) plan from good to great with these next steps:

Meaningful employee savings rates

Is your average deferral rate higher than your employer match? If so, that’s great! Your employees see the value in saving beyond your matching program. We set the benchmark for employee savings at an average rate of 8%.

Analysis of anticipated income replacement ratios

The most important thing a 401(k) will do is serve as wage replacement when your employee is retired. Plan sponsors can provide anticipated income replacement ratios to each employee to make sure they are on track for financially stability during retirement.

Appropriate asset allocation

Do your employees know what they are invested in and why? Provide tools to help your employees invest for their future: provide a risk questionnaire with corresponding model portfolios. Provide your employees with information on who to call if they have investment questions.

Lower employee turnover

Employee turnover is expensive! Educate your employees on the benefits available through your retirement plan offering to lower turnover and lower expenses.

High attendance at financial wellness meetings or seminars

Are you offering educational events to your plan participants? If so, personalize topics to your employees. Do your employees have significant student debt? Hold a seminar on strategies for debt reduction or consider adding a program that helps employees with student debt.