Whether it is out-of-pocket costs or costs associated with resources, expense can be a key deterrent in getting to the optimal defined-contribution plan. Cost can make plan sponsors reluctant to add advisory services or even automated features.
Many industry pundits point to recent statistics as signs of lingering economic hardships impacting defined contribution plan participants. But these statistics may also suggest potential disillusionment with 401(k) plans.
The Employee Benefit Research Institute's 'Retirement Confidence' survey found that 44 percent of workers who simply calculated a goal retirement amount report that they made changes to their retirement planning as a result.
According to Employee Benefit Research Institute findings, the typical low-income worker, in particular, will need to save significantly more than he or she does today in order to achieve retirement income security.
Adding and communicating a Roth-designated account can be well worth the effort, especially in the current environment. The addition of Roth can serve as an excellent way of reinvigorating a plan and re-engaging employees in their efforts to save for retirement.
Commentary: With many of the fires of 2008-2009 extinguished or at least under control, plan sponsors are now asking: What are the next ticking time bombs to avoid? Or to put it another way: How can we disaster-proof our plans against the next financial upheaval—whatever that may be? Here are some approaches under consideration.