Greg Lewis works with retirement plan sponsors putting strategies in place to boost plan participation rates, educate employees about saving for retirement, and ensure best practices are followed to maintain healthy, compliant plans. As the owner of Pinnacle Pension Consultants, he advises companies from startups to large publicly traded companies with hundreds of participants. He spoke with the Reilly Business Advisor recently about how plan sponsors can get the most out of a relationship with an employee benefit plan consultant.
Q – What is the most important element of a retirement plan that a consultant can help a plan sponsor with?
A – The most important thing is for a plan sponsor to be participant centric. That means being deliberate and focused on building as high a level of participation as possible. If a sponsor wants to attract and retain good people, they’ll put time and effort into a strong plan. They’ll allow us to do more outreach and have contact with their employees.
Q – What does that look like?
A – The leadership of one of our client companies was concerned about low participation rates and asked our help in driving up the numbers. They wanted more people in the plan, and they wanted participants to save at a higher rate. We started with group education sessions and then looked at who was not in the plan. We called every one of them for a personal conversation. Calls to individual employees are not common in our business, but we are willing to do it. We called about 80 employees and the majority said they’d been meaning to sign up but never got around to it; they were glad we called. We got them enrolled online right there during the calls. Most advisors focus on the investment side of retirement plans, but we want to see higher participation and contribution rates.
Q – What about the nuts and bolts of a retirement plan? How do you advise clients on plan design?
A – Every plan sponsor should have a fiduciary advisor. A fiduciary advisor is required to provide guidance based on strategies that will strengthen the sponsor’s plan and result in the strongest financial outcome. We will lay out best practices like an investment policy statement that sets out an investment review schedule and makes sure participant expenses are reasonable. The most important design feature you can have is automatic plan enrollment, and every plan should have a Roth feature these days.
Q – What gets participants fired up to participate in a retirement plan?
A – Money. The employer match is incredibly important. If free money won’t convince someone to save for retirement, nothing will.
Q – What trends are you seeing today?
A – We are pleasantly surprised by what we’re seeing from the Millennials and Gen Z workers. They’re doing a good job of saving. Their parents are retiring today without having saved enough money, mainly because 401(k) plans weren’t around when they started their careers. Once they started saving, many of them didn’t save enough. But the young people coming into the workforce today have seen their parents benefit from 401(k) plans. The parents are pushing that knowledge down to the younger generation.
