Jerry Ripperger
Stock Plan Services Consulting
When I was a kid, I’d occasionally go camping. This provided an excellent opportunity to use my trusty Swiss Army knife. This tool had everything a 10-year-old needed to survive in the wilderness (i.e., the back yard).
It had a spoon, fork, knife, saw, compass, corkscrew—I'm not sure what a 10-year-old was supposed to do with a corkscrew—and too many other tools to remember. Everything was in one convenient place though. I was sure I could conquer the world with ease.
Fast forward a few decades (or more) and not everything is that convenient. Take retirement savings as an example. Your clients may have accounts from prior employers with multiple service providers. Participants may have more than one plan they can participate in with different companies providing administration services—for example, they may have a nonqualified deferred compensation plan or an employee stock ownership plan in addition to their 401(k). Would a Swiss Army knife solution benefit them?
As the focus increasingly turns to outcomes, understanding all a participant’s plans and how they contribute to their retirement readiness is critical. Here are a few “Swiss Army tools” to focus on:
- Consolidate retirement savings from prior employers or individual retirement accounts (IRAs) into the current 401(k) plan.
- Engage an administrator who can manage all plan types—defined benefit, defined contribution, deferred compensation, and equity compensation.
- Prioritize participant-facing tools, including a consolidated website, mobile app, and contact center. Projection tools should be able to include all plans while allowing participants flexibility to determine which plans or how much.
- Prioritize participant education so that they understand how the plans work together and to help them achieve their retirement goals.
Consolidating capabilities and tools can benefit plan participants and help them on their retirement journey. Learn more at https://landing.principal.com/esop.