Face it, most 401(k) plan sponsors have better things to do than work on their company's retirement plan. That doesn't mean the work isn't important. It just means most executives tasked with administering the retirement plan wear multiple hats.

Those other hats make money for the company. Their 401(k) hat doesn't.

Yet, wear that hat they must (somebody has to). And if they must wear that hat, then they have a duty to fully understand (and embrace) the role they play. That's where the 401(k) IPS can be of most use.

In many ways, the IPS represents a learning syllabus as well as a plan blueprint.

A properly constructed 401(k) IPS first demonstrates how the plan is used to support the broader mission of the company. This part should be easy for the corporate executives since it will no doubt reference the firm's strategic plan.

A firm's employee benefits offering represent a calculated tactic to improve the company by attracting and retaining top-notch workers. This and other company tactics comprise the firm's overall strategic plan. Executing each such element with precision allows a company to meet its short-term and long-term goals. This drives profits, and profits drive sustainability.

The vision that envelops a corporate strategic plan must find itself also reflected in the company's 401(k) IPS. The nuts and bolts of the 401(k) plan should be tied into the nuts and bolts of the company's broader strategic initiatives. Doing this achieves multiple objectives:

First, to the extent employees familiarize themselves with the IPS, it allows them to see how their interests and the company's interests align. A 401(k) plan that makes retirement saving easier and helps build the employee's nest egg can alleviate retirement-related anxiety. Less stress means more productivity. More productivity means more profits. More profits mean greater compensation opportunities for all employees.

Second, executives responsible for their company's 401(k) will see how the retirement plan represents an important piece to the corporate puzzle. In terms they might better understand, their perception of the 401(k) plan moves from it being a cost center to it becoming a profit center.

Finally, beyond alluding to the company's strategic plan, the 401(k) IPS contains details pertaining to the procedures, guidelines, and benchmarks of the plan itself. This is the realm where the service provider reigns. Ironically, it also represents the part that reins in the service provider.

It is these very details, however, that become the training manual for the plan sponsor. Because they are most expert in these details, it is the service provide who can take the lead as instructor in this training manual.

And what plan sponsor, preoccupied with increasing company profits, wouldn't value such leadership?

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