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Plan sponsors have a fiduciary duty to put their participants' interests first. A strong plan design can help your participants make sound portfolio decisions and give them the best chance for investment success. Our best practices guide can help you develop a lineup that meets the needs of your organization and your participants.
Vanguard offers four best practices for developing a plan lineup:
Identify plan objectives
Plan sponsors should tailor the plan lineup to their participants' demographics. Default investment options, a sound investment menu, and advice and financial wellness programs can help participants maximize the value of the plan.
Review investing fundamentals
The central elements of long-term success—asset allocation, diversification, and cost—apply as much to DC plans as to any investment planning.
Create a tiered investment structure
Logical groupings of investment options can reduce complexity and accommodate participants with varying levels of acumen.
Ensure active, ongoing oversight
Evaluating investment managers, revisiting the plan's policy, and staying abreast of new products and regulations are some of the many responsibilities plan sponsors must monitor over time.
You can read the full reference guide for more details, including a checklist to help you implement the best practices.
Notes:
- Advisory services are provided by Vanguard Advisers, Inc. (VAI), a registered investment advisor.
- There is no guarantee that any particular asset allocation or mix of funds will meet your investment objective or provide you with a given level of income.
- Diversification does not ensure a profit or protect against a loss.