Perspectives : DC Retirement | September 10, 2021

Don't underestimate your power to impact change: Let the data be your guide

You clearly play a critical role in the lives of retirement plan participants.

Advisors offer ongoing guidance and investment expertise to a plan sponsor, who then uses this information to leverage their hands-on knowledge of their employees to design a customized retirement plan. Given the high stakes of securing the financial futures of retirees, and the overwhelming evidence supporting the efficacy of plan design in driving retirement outcomes, advisors have an enormous opportunity to lead participants in a more successful direction.

Participants show concern about the outlook of their retirement plan

A recent survey tells us that the number of employees who grade their financial wellness as "good" or "excellent" declined from 61% in 2018 to 49% in 2020.* This sentiment serves as an opportunity to demonstrate the value of the advisor-plan sponsor relationship—a clear invitation to improve plan design to help enhance financial outcomes.

Put—and keep—financial outcomes on the right course

Aligned with the objectives of both the advisor and plan sponsor, Vanguard Retirement Plan Access™ (VRPA) is happy to be in service of 401(k)s and other retirement plans to deliver a wealth of world-class recordkeeping solutions. In doing so, we can help you do your jobs with greater efficiency and find new ways to grow your business.

* Bank of America, 2020. Workplace Benefits Report.

Professionally managed allocations contributed to advancements in portfolio construction

Participants with professionally managed allocations have their entire account balance invested in a single target-date fund, a single non-target-date balanced fund, a model portfolio, or a managed account advisory service. This approach offers a valued level of portfolio, financial, and emotional support that can help fuel a plan participant's financial well-being.

Consider the value of autoenrollment

The participant-weighted participation rate in VRPA plans in 2020 was 60% higher in those with automatic enrollment. Autoenrollment can mitigate the impact of demographics, as those who are younger, shorter-tenured, and in a lower-income bracket exhibit a much higher participation rate when this option is available.

Discover the benefits of a safe harbor match design

Sixty-nine percent of VRPA plans with an employer contribution had adopted a safe harbor match design as of year-end 2020. A safe harbor 401(k) plan allows a plan sponsor to automatically pass certain annual tests to ensure compliance with IRS regulations—if specific contribution, vesting, and participant notification requirements are met. It can also maximize deferrals for highly compensated employees and relieve a plan's top-heavy status.

See how much value you offer during the toughest of times

How America Saves 2021: Small Business Edition showed us that when faced with the uncertainty and volatility of the ongoing global pandemic, VRPA plan participants didn't run for cover—they stood by their plan and their goals. In fact, only 2% of participants in plans offering any type of in-service withdrawal options used the feature, with 40% of the participant account balance withdrawn, on average. Such results are a testament to the power of thoughtful retirement plan design.

Ready to make a difference in the financial well-being of retirement plan participants?

You're probably already leaving a positive mark on their futures. But if you're ready to gain even more insight into the next steps you should consider, start with How America Saves 2021: Small Business Edition. By exploring the impact of plan design during one of the most turbulent years in recent memory, you can help take the guesswork out of your plan strategy and give rise to wise decisions that yield positive outcomes—for both participants and your business.


  • All investing is subject to risk, including the possible loss of the money you invest.
  • Investments in target-date funds are subject to the risks of their underlying funds. The year in the fund name refers to the approximate year (the target date) when an investor in the fund would retire and leave the workforce. The fund will gradually shift its emphasis from more aggressive investments to more conservative ones based on its target date. An investment in a target-date fund is not guaranteed at any time, including on or after the target date.