Plan Health Not Just About Fees and Investments

By Rebecca Moore | May 16, 2017
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Prudential’s new tool, Plan Power, generates a plan wellness score by measuring outcomes, which are based on how the plan design is expected to encourage positive participant behaviors and, ultimately, improve participants’ retirement outcomes. Plan Power brings together Prudential’s actuarial, investment, and data analytics expertise to predict how most participants will behave in response to various plan features, and uses these predictions to model the outcomes.

When optimizing their participants’ retirement outcomes, most sponsors wish to do so in a cost-effective way, Prudential says. Plan Power addresses this objective as well.

Zlatar says this tool is one in the suite of tools Prudential Retirement has in its financial wellness platform. “The retirement business is focused on delivering retirement outcomes for individuals, but plan sponsors and providers know many events keep participants form achieving that goal. Financial wellness enables individuals to manage day-to-day expenses, save for long-term goals and protect against key risks,” she says.

The company announced a three-year, $5 million partnership with the Aspen Institute to advance solutions that increase financial security for all American workers, and armed employers with new tools and resources to help them to understand and improve the financial health of their workforce.

The partnership will promote broader reforms in both the labor and financial markets to help working people move from financial fragility toward resilience, stability, mobility and prosperity. The investment highlights the need to increase the national discourse about greater economic access as workers bear increasing risk and responsibility for their short- and long-term financial security.

In addition, Prudential has expanded worksite financial wellness solutions: New capabilities include diagnostic tools to help employers better understand the financial needs of their workforce. Employers who adopt these solutions will be able to offer their employees a personalized interactive experience that includes videos, tools, webinars and articles that empower them to manage their financial challenges. The new capabilities build on Prudential’s existing financial wellness solutions, including in-person financial education and counseling resources.

For its part, ForUsAll has introduced its 401(k) Benchmarking Center. According to Jones, the first tool in the center helps plan sponsors understand the fees they are paying. There is a form to request a fee disclosure from a provider, and if they have the fee disclosure, they can upload it and a consultant will produce a report to help them understand the fees.

A second tool helps plan sponsors compare their plan to the industry and best practices. “Plan sponsors can select how many employees they have and receive an output about average fund fees, savings rates, percent of companies with certain plan design features, and all-in bundled fees for plans of similar size,” Jones says.           

Assuming plan sponsors have utilized these two tools, and they find a metric is off and want to do a comparison of providers, the 401(k) Benchmarking Center offers an estimate of costs of three low-cost recordkeepers. The plan sponsor inputs employee count and plan assets. There is also a request for proposals (RFP) template plan sponsors can download, and a simple worksheet for provider comparison.

Finally, Jones says plan sponsors can request a plan health assessment with one of ForUsAll’s consultants. He notes this is available for current clients as well as prospects.