We are all currently navigating an unprecedented crisis environment worldwide. Defined contribution plan sponsors, who were only a few months into digesting the implications of the SECURE Act, now have the retirement-related features of the CARES Act to understand, as well.
Dealing with near-term fiduciary, financial and workforce management issues are understandably the top priorities for most employers right now. Even in less challenging environments, plan design often ranks relatively low on the list of areas for plan sponsor focus. Indeed, Callan's 2020 Defined Contribution Trends Survey ranked plan fees as the top priority, followed by participant communication and fund/manager due diligence.
Encouraging plan sponsors to overcome obstacles was one of the motivations behind the creation of the Excellence & Innovation Awards, which are co-sponsored each year by DCIIA and Pensions & Investments. We're still accepting nominations for the 2020 awards and encourage plan sponsors and service providers to nominate worthy programs and initiatives. Shining a spotlight on success stories is a great way we can all learn from each other.
DCIIA continues to believe that plan design matters, and that plan sponsor executives facing the unique challenges of these trying times should still take the opportunity to have strategic conversations about their plans' designs and long-term goals. While many participants have more immediate and pressing concerns, those managing the retirement plan must retain a focus on the long term, consider where they want participants to be in the years ahead and how the plan design can help them get there.
Following best practices in plan design helps to improve retirement outcomes. As one example, DCIIA research in 2017 found that if — through a combination of plan design and communication — plan sponsors successfully prevented all plan leakage, "savings at retirement under optimized automatic enrollment would increase 9%, to a projected multiple of 8.5 times final earnings, over the course of an entire career."