Annual plan reviews are an essential part of supporting your plan sponsor clients and their participants. But they’re more than just a box to check. Used well, plan reviews can be an invaluable opportunity to strengthen relationships that help you win and retain business.

Use a combination of art and science to showcase the value you bring throughout the year. That means talking about more than just plan costs and investment results. Anyone can plug numbers into a computer and obtain an output. Your job is to bring the “art” by tying the numbers to your clients’ human needs — and how you can help meet them.

Prepare for the meeting by looking through the eyes of the plan sponsor

Successful plan reviews start with thinking about a client’s point of view and the plan’s objectives. This helps you personalize the review process. Your goal is for the client to feel their challenges have been understood and addressed.

Start by looking back at the year that just ended. Consider:
 

• Has the demographic of your client’s workforce changed? Have older employees retired and been replaced with new ones? Have there been any changes to leadership that affect fiduciary roles?
• Has participant behavior changed or been affected by market forces? Have participants largely stayed the course, or did they change investments or contribution rates? Are more or fewer people participating in the plan? What factors may have influenced any changes, and how might they be addressed?
• Have the goals of the plan changed? Has anything happened in the client’s business — positive or negative — that would affect those goals?
• What tangible improvements have been made? How has your work helped improve the plan, and are those efforts reflected in your value proposition statement?

Use plan design to demonstrate your value

With answers to those questions as your guide, think about what levers of plan design you can pull to build upon successes or correct course where needed.

When appropriate for the plan, talk to the client about:

• Auto-enrollment. Help improve participation rate by starting new eligible employees — and maybe some long-standing employees — saving as early as possible.
• Auto-escalation. If your clients are auto-enrolling, they should also consider auto-escalating, which systematically raises the participants’ contribution levels, usually annually, until they reach a predefined cap. This is a great way to address undersaving in retirement plans and can help improve the plan’s deferral rate before your next review.
• Investment re-enrollment. Inappropriate investment choices can affect participants’ retirement futures more than they may realize. An investment re-enrollment, where participants are swept into a default investment (usually an age-appropriate target date fund) unless they opt out, is a great tool to help keep participants on track.

Address the three types of retirement plan investors

Your clients’ employees are not all the same, and neither are their investing styles. That’s why the core investment menu should be evaluated from the standpoint of how it serves the needs of what I consider the three different types of retirement plan investors:

Because the “do-it-for-me” investor is so common, the selection of a QDIA is key. Plan sponsors may appreciate the ease and simplicity of target date funds (TDFs) but may not know how to compare options across different managers’ series. Tools like Target Date ProView, which uses Morningstar data to objectively compare series.

About those costs

You don’t want to make the conversation all about costs, but you can focus on fees relative to the value of services received, as well as the expected benefits of any new fees. Help your client determine whether the current fee structure meets their specific needs and objectives.

Here are some cost-related questions you might ask:
 

• Has the plan undergone any changes such as asset growth or sponsor goals?
• Can any costs be lowered or negotiated?
• Would a different plan solution or cost structure make sense?
• Would the plan benefit from a share class change?
• And what services could the sponsor add that might improve the “health” of the plan?

Remember, the conversation about cost is ultimately a conversation about value. This is a great time to bring out your value proposition statement to help remind clients of everything you do for them.

A little help goes a long way

Last but not least, take advantage of resources and assistance where you can. Your Capital Group team is always a phone call away, and you may find the following resources helpful:

• Retirement Planalyzer®: Find, price, compare and present retirement plan options for plan sponsors.
• Target Date ProView: Use Morningstar data to compare specific target date series based on Department of Labor (DOL) guidance.
• RecordkeeperDirect® plan review sample report: This report compiles plan, participant and investment data to help you assess and improve retirement plans.
  
  

Please don’t hesitate to reach out to your Capital Group team with any questions about these resources or the review process. We’re here to help you win and retain retirement plan business.

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