10 steps DC plan sponsors should take in 2013
With defined contribution plans continuing to assume greater importance in employees’ achieving retirement security, global consulting firm Mercer believes that 2013 is shaping up as a year when many sponsors will take a fresh look at their plans’ objectives, investment options and communications with participants.
“It’s no longer a situation where DC plan sponsors can simply ‘set it and forget it’”, says Amy Reynolds, a partner in Mercer’s retirement business and U.S. defined contribution leader. “The trend is for plan sponsors to regularly evaluate whether their DC plans are successful for both the organization and its employees. As a result, plan sponsors are more active in reviewing plan objectives, more prescriptive when it comes to investment options and more invested in communicating with employees who want to understand how to achieve their own retirement income goals.”
Here are 10 steps Mercer recommends for this year:
1. Define success
A successful DC plan hinges on four factors: increasing participation, increasing the savings amount, investing appropriately and spending wisely. Employers can optimize their plans through skillful, intentional intervention based on the plan’s demographics and employee behavior. Costs should be minimized where appropriate to increase the “value” of each factor.
