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plans offering any type of in-service withdrawal options used the feature, with 40% of the participant account balance withdrawn, on average.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.