Acheson, partner and managing director of Retirement Plan Solutions for Schneider Downs Wealth Management Advisors, LP (www.sdwealthmanagement.com), offers 12 key points to help create better retirement outcomes for plan sponsors and plan participants:

1. Position retirement plans as part of the compensation package. Plan sponsors “must communicate to participants that their retirement plan is a valuable part of their overall compensation,” Acheson says.

2. Keep it simple. Look for ways to incrementally improve long-term results with better performing funds, to create better pre-set portfolio options, and to reduce overall investment and plan management costs.

3. Map out projected income. Just as the Social Security Administration issues annual projections to individuals about their future benefits, Acheson says each plan participant should receive a similar computerized analysis, explaining their projected income from all sources in retirement.

4. Provide auto enrollment. A provision in the Pension Protection Act of 2006 established the regulatory framework for plan sponsors to automatically enroll participants in retirement plans—to help overcome participant apathy.

5. Communicate the importance of saving for retirement. The best way to deliver that message is for employers to make a “reasonable and consistent contribution every year” to employees’ retirement plans.

6. Hire a professional. Engaging a fiduciary service to manage retirement plans will help ensure that fiduciary responsibilities mandated under ERISA are met and associated plan sponsor liabilities are minimized.

7. Look for an open architecture investment platform. “When evaluating the investment funds available on a particular investment platform, look to a custodian offering open architecture” (i.e., no imposed restrictions), he says. “Restrictions usually are a result of revenue-sharing agreements between a fund and the platform provider or the platform provider is pushing their own proprietary options.”

8. Consider using a mix of actively and passively managed funds. “A lot of plan providers strictly make available actively managed funds because there are more fees involved,” Acheson says. Actively managed funds outperform passively managed funds only about 30 percent of the time—over time—but the fees charged for actively managed funds are significantly higher, and many plan sponsors are questioning the value received for the fees paid.

9. Educate participants. Participants need to understand the importance of turning to a professional fiduciary to manage retirement plan investments.

10. Recommend use of an outside investment advisor. When it comes to money management, “most people wing it,” says Acheson. Consequently, most people are better served by hiring an outside advisor to “professionally design an investment portfolio that automatically adjusts itself over time” and that provides the “best opportunity for long-term performance.”

11. Provide older participants access to a retirement planning advisor. “Far too many participants do a good job accumulating money and then make poor decisions immediately following retirement and undo years of hard work and financial prudence,” he says.

12. Look at fee disclosure and transparency issues. Noting that fees vary widely by plan provider, Acheson recommends that plan sponsors “demand” that their current provider disclose all of the fees being paid, using the U.S. Department of Labor’s 401(k) Plan Disclosure Form (www.dol.gov/ebsa/pdf/401kfefm.pdf). Then, the plan sponsor can solicit requests for proposals from other plan providers (in the same format) and easily compare the fees.

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