The Retirement Plan Solution: The Reinvention of Defined Contribution

Part VI. The Plan Sponsor's Role

In this final part of the book, we look at the defined contribution (DC) plan sponsor's objectives and responsibilities. What does the sponsor want the plan to achieve? How can the plan meet those goals more effectively? What are the responsibilities that must be executed?

There are, in effect, two levels of answers to questions of this sort. There's the "bare minimum" answer, which is predicated on the attitude that you're in the business of providing a DC plan, whether or not you wanted to be, and there are some things you simply have to do in order to satisfy the legal requirements that exist and to avoid making a mess of things. You may not have the time or the money or the inclination to do more than the minimum. We would guess that there are many employers who think this way. This part may be of little interest to them.

There are also sponsors who would like to do more than the minimum. If you are one of them, then it is to you that we address these chapters. Our text is pitched at the "best practice" level of answers to the questions, so that you can see what best practice is and decide how far you want to go in that direction. That's consistent with our approach to the whole book: There are ways to do things better; here they are. It's not legally required that you do this, but as DC 2.0 takes root and gradually becomes judged by the higher standard we discussed in the first chapter, these best practices give the retirement system as a whole ...