RESOURCES / PLAN DESIGN
DC committee paralysis
5-minute read
THE TAKEAWAY
Seize the opportunity when your well-planned strategies get upended
Overview
Senior Retirement Strategist
DC committees can take action to keep participants on track
DC committees and consultants sometimes find their deliberately planned strategies to augment their retirement plans have been upended — as happened most recently with COVID-19. Plan sponsors may be tempted to halt planned upgrades, but such a crisis could be the best time to take action to adjust plan designs and discourage detrimental participant behavior. For example, consider whether to change the plan’s auto-escalation formula to get participants back on track.
Action steps
What can defined contribution committees consider doing?
Tips for success
Start now
The longer you delay adjusting your plan, the less time those adjustments have to work for the benefit of your participants. Delays may also hurt both results and productivity.
Lead
When employees are stressed, baby steps may not help ease the need for change. They may just kick success down the road. Your participants are looking to you for leadership.
Provide guidance
Being proactive helps reassure participants and may help employers retain talent during times of uncertainty.
Avoid paralysis
Leverage consultants to help jump-start committee initiatives. Consultants may help clients prioritize projects to tackle.
Explore more plan design resources
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Plan Design
Is your defined contribution plan successful?
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1Source: Morningstar, April 17, 2020
2Source: Charles Schwab Self-Directed Brokerage Account Indicators, March 31, 2020