Art by Leo Espinosa
All of us involved in the retirement plan industry know there is no one perfect plan design for a plan sponsor. How a plan is designed is determined by the sponsoring entity’s overall governance and retirement plan philosophy. The plan is overseen by the retirement plan committee, or committees, influenced by its advisers and the recordkeeper, and is developed based on the company and employee demographics.
In this issue, we are proud to recognize 67 retirement plans, from two PLANSPONSOR awards programs, chosen by way of two different methods.
Our cover story, “Best in Class 401(k) Plans,” names the latest 34 plans to receive this PLANSPONSOR designation, now in its third year. The recognition is given to 401(k) plan sponsors that meet the highest standard of excellence as determined by our research and editorial departments. The 34 recipients of the 2017 designation were selected from data submitted to us by the nearly 3,400 401(k) plans that responded to the 2016 PLANSPONSOR Defined Contribution (DC) Survey. These plans have met the more than 30 criteria that we established as Best in Class practices for 2016.
In addition, the editors of PLANSPONSOR annually recognize retirement plan sponsors that have excelled at improving their plans, so as to improve their participants’ outcomes. The 33 “Plan Sponsor of the Year (PSOY) finalists were specifically nominated—unlike the Best in Class 401(k) plans—by their colleagues or providers; these plan sponsors then answered a series of questions to be considered a finalist in one of the nine categories designated. The judges reviewed the applications and selected as finalists those plans that outshined the rest, in light of the breadth and depth of retirement programs available today.
Observations about this year’s PSOY nominations? This is the third year I’ve had the pleasure of being part of the judging team. Each time, as I’ve read the nominations and interviewed finalists, I’ve noted the closeness and respect that the sponsor/provider relationship can bring. This year, we also observed that several nominations were from sponsors’ counsel, indicating perhaps how concerns about litigation are driving behavioral change and strengthening the bond between sponsors and their trusted attorneys.
The judging committee also saw that more plan sponsors are thinking about the decumulation—not just the accumulation—phase for participants. Finalists mentioned changing their plans, to allow systematic withdrawals, and considering in-plan income options.
Besides recognizing plan sponsors of excellence, we continue to bring you content about best practices. For instance, one essential characteristic of an outstanding plan is a well-considered investment menu. John Keefe discusses, in “State of the Art,” how plan sponsors are considering participant behavior when curating the fund menu—e.g., how they divide it into tiers and overlay labels on each section. Marcia Wagner, Summer Conley, Michael Rosenbaum and Steve Saxon bring in best legal practices.
As always, our goal is to help you take away ideas for your own plan, and, in this issue in particular, there are plenty of opportunities to do just that.