All Things 401k | How Can Our 401(k) Plan Help Us Attract and Retain Star Employees?
With thoughtful design features, you can structure a 401(k) plan that stands out in a time of talent scarcity and meets your employees’ needs. Looking to attract and retain high-quality talent in today’s competitive labor market? Enhancing your 401(k) plan design could be the answer. It could increase your employees’ retirement security and financial well-being while motivating talent to join and stay with the company long-term. With many businesses struggling with staffing issues, savvy executives are realizing that boosting their retirement plan benefits can be a valuable part of the solution. In fact, 35% of employers have already taken proactive steps to stand out from their competitors and ensure their employees remain happy and satisfied.[1] When it comes to successfully recruiting and retaining top talent, the competitiveness of your benefits package is key. As such, you should consider what employees value most when evaluating and implementing 401(k) plan design enhancements. A 401(k) plan that incorporates features that fit the company’s budget and the needs of your workforce is the best of both worlds. Automatic Features Make a Difference Plan design features such as immediate eligibility, automatic enrollment, auto-escalation and frequent plan entry points may help boost 401(k) plan competitiveness and make it easier for employees to save for retirement. Immediate eligibility means employees can participate in the 401(k) on their date of hire, rather than based on their age or time of service. Then these eligible employees could be automatically enrolled into the plan at a meaningful rate (8–10%). Plus employers who adopt automatic enrollment can claim a tax credit of $500 for the first three years.[2] Automatic entry helps increase retirement readiness, a benefit employers can highlight in the recruiting process. Going a step farther, employers could auto-escalate employee retirement saving by 1-2% per year until the employee is saving between 10-15% toward their retirement, the recommended savings rate per year by industry experts.[3] Finally, implementing flexible eligibility requirements and frequent entry points can boost participation rates and enhance overall employee satisfaction levels. The Match Matters Prospective and current employees value employer matching contributions. If an employee is considering multiple job offers, all else being equal, companies that offer a 401(k) with a match may have an advantage. It’s no wonder that more than half of employers (55%) are making matching contributions to employees’ retirement accounts.[4] Employers can help employees understand the value of retirement plan matching contributions by presenting them as part of their total compensation. It demonstrates an investment in your employees’ future, which can go a long way when it comes to attracting new talent and cultivating loyalty among your existing workforce. Enhance Recruiting with Accelerated Vesting Many employers have a waiting period for employees to become vested in employer contributions. One-year vesting periods are common; however, some employers delay letting employees vest in the company match and other employer contributions by as much as six years. Immediate vesting may offer more recruiting power than non-immediate vesting schedules. Again, employees considering more than one job opportunity may be more likely to accept one with a company that offers immediate vesting. Beyond the 401(k): Get Creative Offering a competitive 401(k) plan shows you’re committed to your employees’ financial well-being while helping them save for the future. Outside of a retirement plan benefit, specific financial rewards for longer-term employees can provide additional motivation for them to stay. These benefits may include restricted stock, cash balance plans and non-qualified deferred compensation plans. Offering creative benefits like these can help boost retention by making more tenured employees feel valued and rewarded while enhancing their total compensation. A well-constructed 401(k) plan can be a game-changer for companies looking to attract and retain top-quality talent. By investing thoughtfully in plan design and staying competitive with benefits packages, businesses can stand out from their competitors and gain the advantage needed to succeed in today's challenging labor market.[1] WTW. “2022: The Next Evolution of DC Plans Survey.” Feb. 2022.
[2] IRS. “Retirement Plans Startup Costs Tax Credit.” 16 Jun. 2022. [3] Vanguard. “How America Saves 2022: Insights to Action.” 2022. [4] Vanguard. “How America Saves 2022: Insights to Action.” 2022.
JULIA SANDERS
AIF®, CPFA® | Retirement Relationship Manager
Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.
SCOTT HIGGINS
AIF®, CFP®, CPFA® | Financial Advisor
Since 2012 at Rose Street, Scott has been responsible for helping the firm's individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun fact, Scott has a hobby of filling growlers with coins!Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5787251.1
This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.
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Rose Street Advisors, LLC Named to List of Nation’s Top DC Advisor Teams
ARLINGTON, VA — Rose Street Advisors, LLC has been named to the National Association of Plan Advisors’ list of the nation’s top defined contribution (DC) Advisor Teams with Assets under Advisement over $100 Million.
Unlike other lists, this focuses on individual firms, or what may, in a wirehouse environment, be referred to as a team, or office, and the assets under advisement related to their defined contribution (DC) practice, specifically in a single physical location. The inaugural list was published in 2017.
“Since their inception, NAPA’s various industry lists have been a valuable Who’s Who of who matters in the world of retirement plans and retirement plan advisors,” noted Nevin Adams, Chief Content Officer of the American Retirement Association, and Editor-in-Chief of NAPA-Net, the nation’s leading online resource for retirement plan advisors. “This latest chapter – the NAPA Top DC Advisor Teams, ranked by self-reported DC assets under advisement – presents a compelling case for the positive impact on the nation’s private retirement system”.
Despite the market turmoil in 2022, the record number (362) of teams on this year’s list continue to guide nearly $2 trillion in defined contribution plan assets belonging to more than 56,000 plans covering more than 23 million participants. Located in 41 states and the District of Columbia, each team listed—and to be here they are all in a single physical location—has more than $100 million in AUA, based on self-reported assets under advisement as of Dec. 31, 2022. “As the nation’s leading voice for retirement plan advisors, we are once again pleased to highlight the contributions and commitment of these teams,” noted Adams.
2022 NAPA Top DC Advisor Teams, created by NAPA. Presented in March 2022 for the previous year. All NAPA members with over $100 million in defined contribution assets under advisement made the list. 362 Advisors were recognized. Advisors pay a fee to hold out marketing materials. Not indicative of advisor’s future performance. Your experience may vary. Click here for most recent award information.
You rebalance by selling assets that make up too much of your portfolio and use the proceeds to buy back those that now make up too little of your portfolio. The net effect is to “sell high and buy low.” Ultimately, regular rebalancing can increase the overall return of your portfolio over time. (An automatic rebalancing feature may be available through your current retirement plan provider. Visit your provider’s website for more information.)
The Fiduciary Continuum shows different types of advisors that can provide education only, provide recommendations, make investment selections on your behalf, and certain providers will even manage day-to-day administration for clients. When implementing a new 401(k) plan for an organization, you will likely need an advisor to consult on how to set up the plan and give recommendations on multiple aspects such as plan design, investment selection, understanding legal plan documents, etc.