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June Top Advisor by Participant Outcomes (TAPO)

We look at quantitative, qualitative, and fiduciary aspects

How to quantify the seemingly ‘unquantifiable’

Our practice has always taken a high-touch and high-customization view when it comes to retirement plan participant engagement. We feel it’s important for long-tenured employees to exit the workforce to a comfortable retirement, achieving the successful retirement outcomes that they want and deserve. To accomplish this goal, we look at quantitative, qualitative, and fiduciary aspects in order to design a custom approach for employers.


Our process measures the success of these outcomes in several ways to give us a baseline for how the plan is performing in its goal to create successful retirement outcomes. The first is by participation. One of our plans had a perfect 100 percent participation in both 2013 and 2014. In 2015 it had a  97.1 percent participation.

Secondly, we measure success by overall savings rates. For the same plan, average deferral rates in 2013 were 10.5 percent, 2014 was 11.8 percent and 2015 was 12.2 percent (including non-participants). The 2015 median deferral rate is 7 percent. What’s more impressive is that these high deferral rates have come without a match formula. This employer contributes a very generous 7 percent on a non-elective basis. Amazingly, employees are on average saving a total of 19.2 percent, between employee and employer contributions.

The plan utilizes auto-enroll at a rate of 6 percent, with the intention that if an employee saves 6 percent of their own pay and the employer contributes 7 percent, the combined total of 13 percent is right around industry recommendations for a secure retirement in the future.

Which brings us to our third and perhaps most important measure of success. Using vendor analytics, a whopping 70 percent of the plan’s participants have a predicted retirement income replacement ratio of 70 percent or greater. Compare that to 22 percent, which is the average of all principal participants. Fully 23 percent and 7 percent of the remaining participants are at replacement ratios between 50 percent and 69 percent, as well as greater than 49 percent, respectively.


On a more qualitative basis, we offer our plans several financial education events throughout the year. These events are customized to the needs identified through the goal setting and analysis process with the employer’s retirement plan committee. As an example, with one plan we identified an opportunity to divide the employee groups into three educational groups based on career stage:

  1. Know Your Score: Those early in their career learned about the Retirement Wellness Score and how to get started and stay on track. 94 percent of employees in this bracket attended.
  2. Financial Fitness: Mid-career employees attended a session on financial goals and spending plans. Over 66 percent employees in this range attended.
  3. Tax Strategies and getting the most out of Social Security: Those nearing retirement learned about social security and tax implications. Over 80 percent of employees in this cohort attended.

For those individuals who do not attend in-person, the meetings are typically recorded and an email sent with instructions about how to view the presentation and receive the applicable handouts. These workshops and seminars always receive high praise from the employees. In this particular organization, a high number of employees followed up the group education with a one-on-one meeting to review their individual situation. We are impressed with the high level of employee engagement these types of events garner, as participation is voluntary.


On the fiduciary level, we meet with the committee to assess the overall success of the participant outcome initiatives regularly, and for most clients, this is semi-annually. One of the best practices of the committee is the process documentation of all plan decisions and these outcomes.

Additionally, we put an emphasis on committee fiduciary education, as well as on topics such as in-plan retirement income and the DOL proposals. This piece of the process helps fiduciaries focus on participant outcomes that drive plan decisions.

We feel as a corporate citizen of the Western New York community and a consultant to hundreds of local businesses, we must lead by example. The employees’ and clients’ futures depend on it.

Lisa Petronio, RICP and Chris Kempton are managing directors for the Upstate New York region of Strategic Retirement Partners. The firm is a nationwide independent retirement plan consulting firm that advises employers and plan fiduciaries in the understanding and fulfillment of their responsibilities to the plan, participating employees, and beneficiaries.

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