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1. Decide between offering a “retirement” or “savings” plan
Is your DC plan a “Savings” or “Retirement” program? Many plans have the word “retirement” in their name, but operate more like a savings plan: employees put aside balances they can tap during their careers to address temporary income shortfalls or high-cost life events. However, if you see the program’s goal as helping employees plan and actually save for a secure retirement, then new strategies may be in order. For example, you may now want to default employees to much higher contribution rates than the current norm of 3% or 4%. If you realistically believe the organization can only offer a savings vehicle, then educate employees that they are largely expected to look out for their own retirement income needs.


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