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10 ways sponsors can help employees put their house in order

Establishing best practices across all areas of DC plan management is critical as they have become the primary savings vehicle for many U.S. workers.

By Paula Aven Gladych | Updated on January 02, 2014
Sponsors of defined contribution retirement plans must focus on retirement outcomes that help participants meet their objectives and manage their risk, according to a 2014 forecast by Mercer.

Helping employees put their financial house in order has bottom-line advantages for their employers, the company said, but managing litigation, audit and public-relations risk has become more complex.  The upcoming year will see many changes, including judicial action, regulatory developments and stepped up litigation and enforcement. Mercer believes that establishing best practices across all areas of DC plan management is critical as they have become the primary savings vehicle for many U.S. workers.

Mercer recommends that DC plan sponsors take the following 10 steps in the new year:

1.  Redefine success. A plan is successful if it meets plan sponsor objectives and delivers future financial security to participants. Mercer suggests moving beyond flat metrics such as participation levels and deferral rates.  Instead, analyze all participant behaviors that drive retirement outcomes, and develop sophisticated metrics and interventions to improve those outcomes.

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