Plan Design and Vender Oversight
Behavioral finance studies demonstrate that effective use of certain plan design features can have significant impact on participant outcomes. We help you incorporate plan design features that encourage participation and simplify administration. For instance:
Utilize auto-enrollment and auto-escalate features to overcome inertia, procrastination
- Studies show employees reluctant to “opt-in” are also reluctant to “opt-out”
- Some employees assume default rates reflect what they “should be saving”
- Auto-escalate helps improve employees’ “retirement readiness” over time
“Stretching” employer match incents employees to save at higher deferral rate
- Many employees choose deferral rate equal to maximum employer match
- Some employees assume match is based on what they “should be saving”
Maintain optimal plan menu
- Research shows direct link between participation rates / number of investment choices
- Too many choices, redundant fund strategies can create confusion, negatively impact participation
Your TrueNorth team works on your behalf with service providers to resolve problems, improve operations, and negotiate terms. We also help you identify service enhancements that may become feasible as your Plan grows. And, plan benchmark reports compare features to plans of a similar size and industry in your region. Plan benchmarking helps to keep your Plan competitive in your marketplace.
Fee benchmarking is also an important part of your fiduciary responsibilities. Although decisions are never driven solely by fees, plan expenses matter! We provide fee benchmarking reports and actual vendor quotes to help ensure that Plan expenses are competitive for the investments and services received. We use this information to negotiate on your behalf for more attractive terms.
It may also be necessary to identify a successor who will deliver the services and investments you want at a more attractive cost. Your TrueNorth team helps facilitate your provider search every step of the way, from designing your Request for Proposal to transition monitoring.