PLANADVISER - July/August 2022 - 22

plan design / participant coverage
operations at Mattress Firm in Houston, says customizing
the company plan has been a great tool for recruiting and
retaining workers, besides for competing with peers.
Due to the cyclical nature of sales, Rippel says, Mattress
Firm has tailored its retirement plan to " ensure associates get
the entire match, regardless of the timing of their contributions,
through a true-up process. " She also says the company
has implemented automatic enrollment for newly hired associates,
and the plan additionally is available to all the company's
part-time employees ages 19 and up.
" We did it because, in retail, attraction and retention
for all of our associates is very competitive, " Rippel says.
" Offering this, along with basically all our other benefits to
part-time associates-except medical because it disrupted
the subsidy-increased our ability to attract and retain them. "
Allowing long-term part-timers to join a 401(k) plan is
a key component of the Setting Every Community Up for
Retirement Enhancement Act, enacted in 2020.
relevant to ongoing needs of the business. "
Sometimes, too, creativity is demanded by a special
circumstance or participant request.
This was the case for ASM Research, as Tammy Lassiter,
the firm's HR administrator, described in a panel at the 2022
PLANSPONSOR National Conference, in Orlando, Florida, in
June. Lassiter explained that a Muslim employee presented
her company's retirement plan committee with an issue:
The Islamic faith does not allow for interest to be earned
on funds, and, thus, those who follow Shariah law may not
participate in most 401(k) plans.
The new employee was concerned that she was being
" Offering this along with basically
all our other benefits to part-time
associates-except medical because
it disrupted the subsidy-increased
our ability to attract and retain them. "
The SECURE Act aims to expand retirement plan access
to Americans, by, among other things, incentivizing small
businesses to offer a 401(k) plan. For instance, the SECURE
Act provides tax credits to small businesses that start a
qualified retirement plan, plus offers a new type of multiple
employer plan that makes it easier for small, unrelated businesses
to pool together and establish a single plan.
Additionally, the SECURE Act contains a vital compliance
requirement: Starting in 2024, employers with a 401(k)
plan must permit eligible long-term, part-time employees to
contribute to the plan. While this may seem like a long way
off, applicable employers needed to start tracking their parttimers'
hours last year.
As part of SECURE 2.0-the true name being the
Securing a Strong Retirement Act of 2021, which Congress
is considering-part-time workers' 401(k) plan participation
eligibility would move from three years to two.
Building a Plan Based on Participants' Needs
Rippel suggests that sponsors thinking of customizing their
retirement plans look at what they want to offer and how
" creative " that necessitates they be.
" The complexities in legal requirements, filings, amendments
and notifications generally are much more timeconsuming
and therefore costlier than a non-customized
plan, " Rippel says. " So take some time to weigh your options,
automatically enrolled into the company's 401(k). While it
was an easy fix to change her deferral rate to 0%, there
was no way for her to waive the employer discretionary
contribution. With the help of its plan adviser, Sagemark
Consulting, ASM Research made two plan changes:
A religious exemption was added to the plan document
to allow nonparticipation in the
plan, and a Shariah-compliant fund
was added to the fund lineup. This
second change ensured that Muslim
employees could participate in the
plan and benefit from company
contributions.
While these plan design changes
were prompted by an employee's
specific issue, advisers can also guide
their clients to proactively adopt
innovative ideas for plan design-
e.g., to help participants save more
for retirement or improve their financial wellness.
Nathan Voris, director, investments, insights and consultant
services for Schwab Retirement Plan Services Inc., in
Richfield, Ohio, says retirement plans should be customized
based on the company, the company culture, the financials
and what the employer thinks is right for its participants.
" Most plans are customized. Each plan is pretty unique to
the sponsor, " Voris says. " The way you structure your match
contribution, the way you structure your eligibility, the
investment options you choose for the plan-by and large,
all of our plans are customized by the sponsor on some level. "
A frequent big driver of plan design is the participants'
income replacement needs, Voris says. For example, a large
retailer may have a vast majority of its workers in a similar
income band and have a specific income replacement. " So it
might want to design a plan with a match structure based
on those needs, " he says.
But " if you're a high-tech manufacturer and have a lot of
high-salaried individuals who have a different Social Security
makeup, you may want to stretch your match out, " Voris
says. " You try to use all the tools in your tool kit based on the
needs of that population and that participant base.
" The outcome can lead to a customized plan that's built
not only for the company but also the participants who work
there, " he says. -Judy Faust Hartnett, Michael Katz and Rhea
Wessel all contributed to this story
22 | planadviser.com July-August 2022
http://www.planadviser.com
PLANADVISER - July/August 2022

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