Compiled ByTraci Purdum Taking action on your company's retirement plan now could help you better manage risks, costs and employee scrutiny, says Hewitt Associates LLC, a human resources outsourcing and consulting firm based in Lincolnshire, Ill. "It's important that companies ensure that they're properly managing retirement plans or they may be exposed to fiduciary liability and increased risk associated with higher retirement plan expenses," says Monica Burmeister, global leader of Hewitt's Retirement and Financial Management Practice. "Employers must examine their retirement program design, cost and operations to identify areas of concern and opportunities for change, size up risks and costs involved, and develop an action plan to ensure that their retirement plan house is in order." To do so, Hewitt offers several tips, including:
- Develop your retirement plan objectives: Document your objectives and regularly measure progress against set, quantifiable goals -- modify or update them as appropriate.
- Review your retirement program design -- is it out of date? Don't be afraid to change the plan design to maximize its value.
- Understand current and future pension plan costs: Dramatic changes in retirement plan costs can adversely impact a company's stock price. With the end of contribution holidays and pension surpluses, companies must reassess their cash situation.
- Revisit asset allocation strategies: Consider modeling the cash flow and expense requirements to help determine your company's optimal investment strategy.
- Boost the perceived value of plans among employees: It's more important than ever to communicate how your plans will help employees build retirement income.