It’s important for plan sponsors to define plan goals and what they are going to measure, and the defined metrics should be things they can influence.
Plan sponsors might not know how to measure the success of their retirement plans.
According to Vestwell’s “2020 Retirement Trends Report,” plan advisers and sponsors use different metrics to determine the success of retirement plans. Advisers were more focused on plan participation rates (61% listed it as a top factor versus 39% of plan sponsors), while sponsors were more focused on the administrative side, citing no administration errors as their top priority 60% of the time and minimal time managing a plan 59% of the time.
Having no operational and administrative errors is important, says John Doyle, senior retirement strategist at Capital Group, but if the plan sponsor’s goal is to attract and retain talent or get employees prepared for retirement, it’s not a success measure. “Having no operational and administrative errors should be a success measure for recordkeepers. Plan administration is separate and distinct, unless it has an impact on how participants are using the plan,” he says.
Richard Tatum, president, retirement services, at Vestwell, similarly says having no operational and administrative errors is table stakes. “Your retirement plan is meant to be a benefit and not a burden, and there are many attributes you can look for when selecting a recordkeeper to ensure a more seamless plan experience,” he says.