Russell Investments has developed a new publication called "A Defined Contribution Retirement Plan Handbook" to serve as an essential guide to the complexities of the DC system in a rapidly changing legislative and regulatory environment.
Compiled by three of Russell’s defined contribution experts, Mark Teborek, Kevin Knowles and Michelle Rappa, the practical, easy-to-read handbook covers topics in three broad sections – plan governance, investment considerations and retirement income. It was designed to help sponsors gain a more complete understanding of the issues and options important to consider in designing and implementing DC plans focused more directly on improving retirement income outcomes for plan participants. The handbook examines trends shaping the DC landscape and plan design, and provides expert insights into DC plan fees and default investment considerations, asset class menus, and recommendations for how to think about income solutions.
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"Now is the time for plan sponsors to take an even more active role in helping address America’s retirement savings needs. Some simple improvements can move a plan toward excellence, and this handbook offers clear recommendations on what success ultimately looks like and a path to get there," explained Josh Cohen, managing director and head of institutional defined contribution. "This handbook is ideal for committee members, investment and human resources staff, and their advisors who are interested in learning more about different aspects of defined contribution plans."
Rappa, director of business growth for defined contribution, added that the well-known challenges presented by too few workers enrolling in employers’ DC plans, and too little being saved by those who do, should compel plan sponsors to do more to encourage participation. "Effectively engaging participants requires not only good communication, but also the right plan design attributes," she said. "Auto-enrollment and auto-escalation of contributions, robust investment defaults, as well as re-enrollment and mapping to default investments are must-have features for plans who want to positively influence retirement outcomes."
According to Cohen, the complexities of setting strategy, implementing and administering a plan, and complying with ERISA and DOL regulations and requirements are stretching plan sponsors to the point where they must make strategic decisions about what DC plan responsibilities to retain in-house and what to delegate to specialist fiduciaries. "Sponsors must clearly understand who is responsible for governing the plan, who is responsible for implementation and who is responsible for reviewing to make sure things go smoothly," he said. "The handbook details what a continual governance process looks like and makes the case that governance often requires that plans seek out and delegate aspects of their plan management to third-party experts as needed."
In a related Fiduciary Matters blog posting, Russell’s Chief Research Strategist, Americas Institutional Bob Collie highlights the changing DC landscape.
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