Plan sponsors are wrestling with how the same DC plan can serve the many different demographics within their employee base. For example, a company’s workforce may skew older, but the plan still must address the needs of younger employees who are just starting out on their retirement savings journey. Sponsors may need to address a diversity of job roles and incomes among their participants. A hospital’s plan has to encompass workers as divergent as physicians and orderlies. An insurance company’s plan needs to work for actuaries and call center employees. Even more complex is recognizing and embracing workforce diversity relative to gender, race, ethnicity, culture and other factors.
We recently met with plan sponsors who are evaluating best practices in plan design to meet the diverse needs of their participants. From a plan design perspective, offering access and flexibility is key. Sponsors are also exploring creative ways to help nudge participants into saving more for retirement and diversifying their assets. DC plans are transforming into retirement destinations as a way to offer employees diversification tools and, in many cases, lower fees than rolling into a retail account. We offer some of their tips below.