Insight

The Agility to Adjust

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In difficult economic times, employers must often look for ways to cut costs in their defined contribution (DC) plan to help lower their overall expenses or free-up needed cash for other critical areas of their business. In the midst of COVID-19, many plan sponsors are now conducting this evaluation.

They may be looking to either reduce or suspend matching contributions on nonelective contributions, such as profit-sharing. Many plan sponsors took such measures in the Global Financial Crisis of 2008-2009, and then eventually resumed contributions at the same levels that were in place before the crisis.

Changes in plans, however, cannot be initiated without careful consideration of the legal and plan design requirements for making such changes.  

This article provides a broad overview of the issues plan sponsors must consider and the steps they must take before making changes in the employer contributions to a DC plan. 

To learn more, download our Summer 2020 edition of Shifting DC Times to read The Agility to Adjust article.

Shifting DC Times

Read our bi-annual publication that provides the latest DC thinking across four essential plan components, with ideas you can turn into action.