Risk & Business Magazine CEO/CFO Business Today Magazine Fall 2017 | Page 8

RETIREMENT
Next Generation Retirement

BY: DAN STROH,
SNIDER, FULLER AND STROH
Do You Have A Plan?
O
ften when a company
reviews its retirement
plan, the focus is solely
on fund performance and
fees. It’s equally important,
though, to analyze the structure of the
plan, as well. A number of additional
features have become more and more
common in the retirement plan world,
and it’s worth exploring whether these
features are right for your company. Quite
simply, the retirement plan structures
that have worked in the past aren’t the
only options available anymore. A Next
Generation Retirement Plan is one that
offers participants both robust features
and encourages savings.
One feature of Next Generation Retirement
Plans is auto-enrollment, sometimes called
an Automatic Contribution Arrangement.
Under this strategy, employers will
automatically enroll newly eligible
employees into a company retirement
plan at a set deferral percentage and with
an automatic fund selection. This is a
hands-off way to nudge your employees to
begin saving for retirement and simplify
the selection of investments. The auto-
enrollment feature can start employees at
just one percent or two percent of pay and
direct their funds into an age-appropriate
target date fund or other option. The
target date is the approximate date when
employees plan to start withdrawing their
money. Generally, the asset allocation of
each fund will change on an annual basis
with the asset allocation becoming more
conservative as the fund nears the target
retirement date. Employees