In today’s tight labor market, demonstrating to prospective and current employees that your organization cares about their entire well-being, both physical and financial, can solidify the deal when you’re hiring top talent and want to keep them on staff. Offering a modern retirement plan reinforces this commitment to financial wellness.

Unfortunately, many retirement plans fail to stay current with emerging trends for investments, plan design and governance, exposing the sponsor to greater fiduciary liability and delivering less-than-optimal outcomes for employees. Companies in this situation should consider enhancing their plans—otherwise they risk losing high-performing talent to competitors.

The following is a short list of questions to help plan sponsors and their advisers identify potential opportunities for improvement.

• Are employees offered a comprehensive financial wellness program? Offering concierge-level services such as financial wellness coaching can deliver a significant performance advantage for retirement plan participants. Additional services, including student loan and credit card debt counseling, insurance needs-analysis, asset decumulation strategies and tax-planning, can also demonstrate that an employer truly cares about its workers’ overall financial well-being, not just their retirement.
• Are plan participant outcomes measured? Historically, investment performance and participation rates were the key indicators of plan success, but this is no longer the case. Today, it is a best practice to measure plan health with a comprehensive metric that identifies each plan participant’s ability to secure adequate retirement income. In other words, “retirement readiness” is now viewed as the best measure of plan success. Tracking retirement readiness allows an employer to effectively align benefit strategies and direct efforts to help participants achieve optimal outcomes. Helping employees keep their retirement savings on track often leads to a greater appreciation for both the plan and the overall organization.   
• Has the plan sponsor considered opportunities for outsourcing? Managing a retirement plan, particularly one with a strong plan health metric, takes a significant amount of time. Automating and outsourcing routine tasks, such as payroll data submission and the distribution of employee communications, can significantly reduce the plan sponsor workload. The less time the employer needs to spend managing the plan, the more time the human resources (HR) team has to focus on other important employee initiatives and priorities.   
• Are plan fees regularly reassessed? As a fiduciary, plan sponsors have to ensure plan fees are reasonable based on the value of the services being provided. More than ever before, employees are acutely aware of this responsibility, and the impact higher expenses can have on their retirement savings. Employees trust the plan sponsors to deliver on their fiduciary commitments and expect their retirement plan to offer the best combination of cost-effective, high-performing investment options.
• Does the retirement plan offer true open architecture? Depending on a plan’s recordkeeper, it may be contractually obligated to use specific strategies or share classes that are not the least expensive available. True open architecture provides employees access to the investment options they want and gives the sponsor flexibility to deliver a fund lineup that is optimally designed for employees, accounting for their relative risk tolerances and goals.

Addressing the above questions can start the conversation about improving a retirement plan. In today’s tight labor market, firms need to decide how they can differentiate themselves from the pack. Even if a plan sponsor feels its offerings are up to snuff, it’s just as important to keep this edge. Regularly reviewing the plan will mean participants benefit from emerging trends.

Neal Smith is a principal at Cerity Partners.

Note from the editor: This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of Institutional Shareholder Services Inc. (ISS) or its affiliates.