Although he acknowledges that automatic enrollment and other features have significantly improved retirement saving opportunities available to American workers, Mark Iwry, senior advisor to the Secretary of the Treasury, recently suggested that further additions and changes to 401k plans could strengthen them.
At a recent panel sponsored by the U.S. Chamber of Commerce, Iwry suggested that the next step in 401k plan design and implementation does not require new legislation or significant expenditures by employers, Investment News reports. One potential change would be to expand automatic enrollment, usually applied to new employees, to cover any workers not participating in the 401k plan.
To encourage participation and higher contribution levels, plan design could structure employer matching contributions to encourage higher employee contributions or offer lower-wage workers a better rate on the match. Retirement and employee benefit plan administration changes can impact hiring and retention, worker satisfaction and more, some professionals indicate.
This is particularly true for employees who have competing job offers, as they can look at benefit offerings to decide between them, one investment consulting firm told Plan Sponsor. The way matching is designed can also encourage employees to put in more years at a given company in order to derive the maximum benefit, the company suggests.
