As target date funds continue to garner a significant portion of retirement plan assets, it becomes increasingly important for plan fiduciaries to establish a process for comparing and selecting target date strategies. HANYS Benefit Services has created a Fiduciary Checklist for Target Date Fund Decisions . Download the attached checklist to help plan fiduciaries stay compliant and feel confident they are following the Department of Labor Tips for ERISA Plan Fiduciaries. If you have any questions, or would like to begin talking to a retirement plan advisor, please get in touch by calling (800) 388-1963 or e-mail us at h bs@hanys.org .

To assess plan health, comprehensive Annual Plan Reviews continue to be of value, and plan providers are developing more concise versions of the report — offered on paper or online. According to the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health , plan sponsors use plan health data to get quick, timely updates on employee retirement preparedness levels and to help meet their goals by leveraging data to make informed plan design decisions. Next steps for plan sponsors Review year-over-year trends to identify patterns and opportunities. Compare your plan by industry, asset size, and number of participants to set competitive goals. Work with your provider to optimize participant data to help limit assumptions and provide more accurate reporting. Continue to monitor traditional success measures — balances, contribution rates and diversification — while adding new metrics, such as income replacement rates. Work with your p

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health, plan providers agree that retirement readiness is unique to each individual. A single, accurate income replacement rate does not completely define retirement readiness. Yet, replacement rate is the one measure that seems to be gaining momentum among plan sponsors. Whether plan participants need between 70% and 85% of pre-retirement income, or whether they plan to retire at age 62, 65, 67 or older, plan sponsors are unanimous in the belief that translating assets to potential income is critical. Take action on retirement readiness: Work with your recordkeeper, plan advisors and consultants to generate greater employee engagement, and seek an approach that makes it easy for participants to take action. Ask for employee communications to demonstrate the benefits and impacts of measured, realistic, small steps and to promote content that’s neither simplistic nor cond

In the Lincoln Financial Group study, You are here: Understanding financial wellness, retirement readiness and plan health , plan sponsors reported that employees need financial education, and they believe instituting a financial wellness program leads to improved job performance and increased employee loyalty. The industry defines “financial wellness” as a program of financial topics delivered through multiple channels to help people minimize their financial challenges. Financial wellness is aspirational, and the path to wellness for participants involves setting reasonable goals and taking positive steps forward. As financial wellness programs become more prevalent and significant over the next few years, we anticipate closer alignment with health and wellness programs. New service providers and program opportunities are rapidly emerging. Best practice considerations: Talk with your retirement plan provider, advisor or consultant about available financial wellness resources. Survey p

In the study, You are here: Understanding financial wellness, retirement readiness and plan health , the Lincoln Financial Group explored three emerging trends in retirement plan administration. Financial wellness programs . Similar to health wellness programs, financial wellness programs can be adopted by a plan sponsor to improve an individual’s financial health so he or she can accomplish specific financial goals, such as saving amounts sufficient for retirement. In many cases, low participation and savings rates in retirement plans are the results of an inability to save due to financial challenges, such as poor budgeting and credit card debt. Retirement readiness communications. Retirement readiness communications are designed to help participants understand how much income they may need to achieve their retirement goals, whether their savings are on track, and how any shortfalls can be addressed. For plan sponsors, retirement readiness indicators provide an opportunity to monitor

According to the 2014 Retirement Plan Survey conducted by HANYS Benefit Services, approximately one-half of the responding retirement plan sponsors offer automatic enrollment. Offered in conjunction with automatic escalation, such features can positively impact participant behavior and improve retirement readiness. This article examines some best practices to be considered when implementing automatic features in defined contribution plans that can produce greater results per dollar of employer cost. Background The utilization of automatic features in defined contribution plans has increased significantly since they were first introduced as part of the Pension Protection Act of 2006 (PPA). More plans are adopting these provisions, resulting in higher participation rates among employees. Although this is a positive trend, certain design features actually thwart the success that could otherwise be achieved. Specifically: relatively low default deferral rates result in lower savings; autom

Many participants lack the ability, time, and/or desire to effectively make sound investment decisions and manage their accounts on an ongoing basis. Traditionally, many plan sponsors felt their responsibility was to offer a broad range of investment options together with employee education. The results, all too often, were that participants were overwhelmed with choice and rarely availed themselves of the education. In recent years, the trend has been to limit the number of investment options and guide participant behavior. The investment menu structure may be just as important as the actual investment options themselves. An effective menu design will address the various participant behaviors: Properly done, a well-designed investment menu can direct behaviors and give participants the confidence they need to feel comfortable with their investment decisions. Read Improving Participant Outcomes: An Action Plan for Plan Sponsors and start developing your action plan to improve particip