Design Matters: The Retirement Tier
DCIIA has published a series of brief white papers and related resources highlighting a retirement tier’s potential components, exploring its benefits and challenges for plan sponsors, and providing a roadmap for implementation. (Click through to visit our dedicated landing page for this series.)
Design Matters: Plan Distribution Options
Taking Money Out for Retirement
DCIIA believes that one of the primary roles of a DC plan should be to create adequate retirement income for the plan’s participants. This paper covers topics including:
- Common distribution practices today
- Reconsidering and updating plan objectives and design
- Retiree-friendly distribution programs
- Educating participants about their retirement choices
Design Matters - The Influence of DC Plan Design on Retirement Outcomes
DCIIA has been working on research geared to understanding 401(k) plan contributions to the retirement readiness of American workers since 2010. This paper draws on EBRI’s Retirement Security Projection Model® and explores the current state
of the impact of 401(k) plans and other retirement savings plans on overall retirement preparedness in a post-Pension Protection Act (PPA) DC environment.
Building a Common Language to Promote Adoption of Auto Features in DC Plans
DCIIA’s Retirement Research Board embarked on a series of initiatives to identify ways to create consensus definitions for varying auto features used within DC plans. The outcome of these projects is this series of auto feature definitions.
Automatic Plan Features in Defined Contribution Plans:
What’s in it for Plan Sponsors?
This paper seeks to offer a new perspective to plan sponsors who desire to implement or enhance automatic plan features in a defined contribution plan. Specifically, this paper highlights several potential benefits to the employer and profiles
plan sponsors who have experienced these benefits. Additionally, DCIIA provides a roadmap for implementation that suggests strategies a plan sponsor may employ to implement automatic plan features over a multi-year period.
Retirement Income Solutions: A Guide for Plan Sponsors
Considerations and case studies to help employers understand and evaluate retirement income options
With this paper, DCIIA describes many of the tools and withdrawal strategies (both guaranteed and non-guaranteed) that support plan participants’ income needs as they move toward and live in retirement.
Defined Contribution Plan Success Factors Framework for Plans with an Objective of Retirement Income Adequacy
DCIIA has developed this best practices framework to outline actions that plan sponsors and fiduciaries can take to build plans that have the greatest potential to help participants achieve retirement readiness.
Implementing Automatic Features in DC Plans
Frequently Asked Questions
This resource is the third in a series on best practices in implementing automatic features in DC plans and seeks questions that plan sponsors and their advisors may have when putting auto features into practice.
Best Practices When Implementing Auto Features in DC Plans
This second-in-a-series paper describes how to implement auto features in DC plans in more robust ways to help achieve better outcomes for plan participants.
Institutionalizing DC Plans - Reasons Why and Methods How
In this paper, DCIIA examines what is meant by institutionalization, how plan sponsors might go about adopting institutional strategies in their DC plans, and possible benefits of doing so as well as potential barriers to overcome.
Plug the Drain: 401(k) Leakage and the Impact on Retirement
DCIIA examines the impact of leakage factors on workers’ retirement income adequacy. We examine how loans, hardship withdrawals, distributions and cash outs impact potential outcomes.
The Impact of Auto-enrollment and Automatic Contribution Escalation on Retirement Income Adequacy
This Research Report expands upon earlier work by EBRI to provide the first results of a new simulation model that estimates the impact of changing 401(k) plan design variables and assumptions on retirement income adequacy.
Raising the Bar: Pumping Up Retirement Savings
DCIIA shows strong evidence that by adjusting the implementation of automatic features and influencing certain employee actions, plan sponsors can materially improve retirement outcomes for all employees. The paper uses simulation results
from the EBRI Retirement Security Projection Model®.
Defined Contribution Consulting Study
The PIMCO Defined Contribution Consulting Study seeks to help consultants, advisors and plan sponsors understand current views and trends within the DC marketplace.
The New Brain Inside Today's Retirement Plan
Vanguard discusses how progressive DC plan providers are using AI to give individuals the nudges they need when they need them.
Build a Retirement Tier in Your DC Plan
Capital Group notes, "To become a more effective retirement solution, deﬁned contribution (DC) plans must evolve to better serve retirees who remain in the plan."
Recalibrating Your Defined Contribution Plan: How Reenrollment Can Help Both Plan Participants and Plan Sponsors
AllianceBernstein notes that "while some participants are actively involved in choosing investments for their account, many participants don’t make the best choices—and some make no choices at all."
Would Your Plan Benefit From a Lifetime Income Solution? A Checklist for Plan Sponsors
AllianceBernstein notes that "a retirement income solution makes sense for many plans—but not all plans. Walk through our guide and see if your perspective points toward adding a retirement income solution."
The Final Frontier: Adding a Retirement Tier
Trucker Huss highlights recent insights on the retirement tier topic including DCIIA's series of white papers (featured on this page -- "Design Matters: The Retirement Tier").
DC Plan Hacks: Tips for an Efficient Design
In this article, Callan outlines features that sponsors should consider for their plans, including automating savings, diversifying tax risk, designing for decumulation, and more.
Defined Contribution Retirement Plan Handbook
This handbook by Russell Investments is designed to help you better understand today’s DC market and prevailing best practices as you build a plan to help meet participants’ retirement income needs within the context of meeting
your fiduciary obligations.
Generating and Protecting Retirement Income in Defined Contribution Plans
In this report, Willis Towers Watson and Angela M. Antonelli, Research Professor and Executive Director, Georgetown University Center for Retirement Initiatives, provide an analysis of how different solutions address participant
Open MEPs — What’s All the Fuss About?
In this blog post, Mercer notes: “Open MEPS could lower costs, lead to better participant outcomes, streamline administrative duties, limit fiduciary responsibilities — and so much more.
Open MEPs: A Promising Way to Narrow the Coverage Gap
Great-West Financial notes: "As discussions continue about expanding access to workplace retirement plans, it’s important to understand the dynamics driving both the coverage gap and small businesses’ decision-making when
it comes to retirement plans. Our research shows that small business owners would be interested in joining an open MEP. This paper explores why."
Getting Your Participants Safely Down Drawdown Mountain
Vanguard invites you to help your participants down Drawdown Mountain by making sure your plan is retiree-friendly.
The Defined Contribution Plan Proposition: Retirement Readiness
WillisTowersWatson notes that many sponsors evaluate their employees’ progress by relying on snapshots of plan-wide aggregate data. This offers little insight to help understand and improve their workers’ retirement readiness,
or to measure sponsors’ return on the considerable capital they devote to their plans. Sponsors can strengthen their plan governance and improve their plans’ return on investment by using detailed analytics that evaluate specific segments
of their employee population based on age, job category, tenure and benefit structure. The right analytics highlight those employees and groups most at risk, and allow sponsors to determine which participant tools and strategies best prepare
employees for retirement.
Incorporating Behavioral Risk Preferences in Retirement Income Strategy Design
T. Rowe Price studied the impact of demographics (the interaction between salary and expected mortality) and risk preference on potential optimized withdrawal strategies in retirement in order to demonstrate why investors’
behavioral risk preferences should play a significant role in retirement income strategy design.
Helping DC Plan Participants in the ‘Distribution Phase’
In this paper, Callan's Tom Shingler and James Veneruso discuss our research on the “distribution phase” of DC plans; that is, the period in which participants are drawing down assets. Plan sponsors should evaluate the breadth
of choices they wish to offer retirees to meet their needs, as well as the level of fees and complexity. Once operational considerations have been addressed, plans must focus on the fund lineup and the overall communication efforts, which
differ from those needed for the “accumulation phase” when participants are building up their wealth for retirement.
Retirement Distribution Decisions Among DC Participants
This Vanguard research paper discusses the implications of recent retirement distribution decisions for target-date funds and retirement income.
A New Way to Plan for Health Care Costs in Retirement
A new model from Vanguard along with Mercer Health and Benefits offers key guidance on planning for retiree health care costs.
Plan Design Has Made Us Better Investors
Vanguard blogs that sophisticated plan design has helped improve retirement readiness
Automatic Enrollment: The Power of the Default
A Vanguard research paper examines how default decisions in defined contribution plans affect retirement savings.
Should You Reenroll Your Plan Into a QDIA?
Vanguard’s Shelly Preston outlines implementation considerations for reenrollment and illustrates the effect reenrollment may have on retirement readiness.
Two Cheers for Plan Design
Vanguard on plan sponsors, courageous plan design and helping participants increase retirement savings rates.
Five Areas of Focus for DC Plans
PGIM notes in this white paper, “Growing reliance as a primary retirement savings vehicle, default-driven behavior, and increasing fiduciary scrutiny continue to characterize the defined contribution (DC) environment. Given
these trends, we have identified five key areas plan sponsors and their advisors should focus on to achieve the objectives of a DC plan in helping participants meet their retirement liabilities and manage key risks. Here, we address both
what we believe has been answered and the questions that remain to be solved among plan design, public policy, investments, default options, and post-retirement.”
In Focus: The Small Business Opportunity
In this white paper, Ascensus notes, “Millions of new workers will have access to workplace savings as a result of emerging policies and business practices. Advisors will play a critical role in helping small business to navigate
this evolving ecosystem of products, technologies, and relationships, helping to determine which retirement plan options best serve their clients.”
Simplify Menus to Meet Participant Objectives
Capital Group notes that plan sponsors can set up better decision-making from participants by simplifying their investment options. Fewer and easier-to-understand menu choices can encourage more appropriate selections, leading
to better potential outcomes.