Morgan Stanley at Work has released research from a workplace retirement study that shows plan sponsors continue to see the 401(k) as a leading retirement benefit when it comes to attracting and retaining talent. However, plan design is a differentiator for companies as are 401(k) plans with a financial advisor, or that offer features like Roth or company match.

Plan sponsors cite features of an attractive 401(k) plan to boost engagement and participation including:

• Access to a Financial Advisor strongly correlates with employee participation: Of those plan sponsors who reported full employee participation, 80% had a plan financial advisor. A 401(k) financial advisor brings value for enrollment, engagement, and talent.
• Plan design makes a difference: In addition to a 401(k) benefit plan, plan sponsors report 23% of companies also offer a Roth 401(k), followed by auto-enrollment (20%), and profit sharing (18%) to help encourage enrollment.
• Auto features help increase participation: Plan sponsors identified automatic escalation (43%), automatic employer contribution (40%), and automatic enrollment (37%) as plan features with the highest participation, helping employers meet employees where they are today.
• Education should be engaging, tailored, and digital: Most plan sponsors (87%) believe providers are sharing engaging participant retirement and financial education. However, they say content should be even more engaging and based on individual financial stages (44%), delivered through digital tools (39%), and specifically tailored to life events (36%).

With a tight labor market continuing to plague employers, high turnovers and employee options, plan sponsors are recognizing the need to differentiate themselves with the right benefits and financial options. Both the 401(k) plan itself, and its design, must be considered in tandem to emphasize that difference.