Los Angeles partner Fred Reish's monthly column, "Recipe for Success" in PLANSPONSOR Magazine discusses how the definition of success is constantly changing. If plan sponsors want to offer successful 401(k) plans they need to participate in that evolution.
Fred notes that we are now evolving into the next generation of success standards, that the new measurement will be based on back-end results. The question will now be, 'what is the plan producing, rather than what is the plan doing?'
Fred discusses that success will be measured by retirement income, not account balances. The need for benefits in retirement is month-to-month and not lump-sum.
Fred goes on to discuss that plan sponsors will know if they are evolving to the new standard by whether the plan offers gap analysis to its participants. Meaning, that gap analysis tells participants whether they are on the course to having adequate retirement income or not.