CHICAGO, IL--(Marketwired - Oct 22, 2014) - BMO Retirement Services today released a white paper entitled "BMO Defined Contribution IQ™: Participation and Contributions Rates." This is the fourth paper in this nine-part series that has been developed to help plan sponsors, along with their consultants, cost-effectively improve their company's 401(k) plans. The latest white paper highlights the importance of benchmarking participation rates and average deferrals, which are key gauges for sponsors wanting to ensure their employer-sponsored retirement plans are competitive within their industries and geographies.
To use the power of benchmarking intelligently, BMO Retirement Services underscores t he three important areas where sponsors can focus their efforts. These include:
- Shortening eligibility and the need for plan sponsors to consider approaches beyond automatic enrollment.
- Understanding the role matching contributions can play and how plan sponsors can more cost-effectively use their employer match to increase participant utilization.
- Deciding between profit sharing and employer matching and how aligning the goals of the employer and the employee can also boost participation and deferral rates.
Within all of these areas, the paper suggests ways sponsors and their advisors can work cooperatively with their recordkeeper to improve each.
"From our 30-plus years of administering 401(k) plans, we have learned that sponsors and recordkeepers need to reach beyond the 'three autos' of automatic enrollment, automatic escalation and automatic investment options," said Todd Perala, series author and Director of Strategic Initiatives, Retirement and Trust Services, BMO Global Asset Management. "Being a good recordkeeper means being able to assess the demands each client faces. Only then can we offer the best solution -- one that helps the employer be competitive in their marketplace while also helping employees best utilize their retirement savings plan."
Mr. Perala added, "Plan design is certainly important, but employee participation and contribution rates can be significantly improved by setting goals that are both specific and realistic, and by instituting a focused participant communication plan."
To read the full white paper, visit: www.bmo.com/dciq.
For more information about BMO Retirement Services, please visit: www.bmoretirementservices.com.
About BMO Retirement Services
BMO Retirement Services is an integral part of BMO Global Asset Management and a premiere, award-winning provider of retirement services. We have been recognized as a national provider of both defined contribution recordkeeping and defined contribution investment-only services by the National Association of Plan Advisors.
BMO Global Asset Management provides holistic, solution-driven services to our institutional and high-net-worth clients. With a 40-year legacy of fiduciary service -- and goal of promoting retirement readiness to our more than 500,000 participants in over 1,000 retirement plans -- our clients include retirement plans, Taft-Hartley funds, government and public funds, not-for-profit organizations and family offices. BMO Global Asset Management's commitment to service excellence has led us to be recognized by Pension & Investments as one of the Top 100 largest asset managers.
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