By Mark Olsen, Managing Director at PlanPILOT
Pull out your plan document and ask your committee a simple question:
When did we last look at the entire plan? All at once?
For many retirement plan committees, the answer is “Never.”
Plans typically aren’t designed in a single sitting. Auto-enrollment gets approved one year, the loan provision gets loosened a few years later, and a SECURE 2.0 option comes on the heels of a recordkeeper presentation or a legislative deadline. Each decision is weighed on its own merits, and there’s never a meeting to discuss how the pieces behave together.
That’s an oversight gap, and an understandable one since incremental decision-making produces it almost automatically. The result is often a plan that looks modern on paper while some of its features work under cross-purposes. Each feature may be defensible, yet the more difficult question for a committee is whether the plan functions as one coherent design.
Where Do Plan Features Collide?
These are the plan conflicts we see most often:
The auto-enrollment default vs. the match formula: A 3% default paired with a match that rewards contributions up to 6% anchors participants below the full match. Enrollment goes up, yet participants still leave employer dollars unclaimed.
According to Vanguard’s How America Saves 2026, 62% of plans with automatic enrollment now default employees at 4% or higher, which means close to four in ten still start lower. Pairing the default with auto-escalation, or with a “stretch” match that spreads the same employer dollars across a higher savings rate, can close that gap.
Escalation caps vs. readiness targets: Automatic increases typically rise 1% a year and stop at 10%. If the plan’s own retirement readiness modeling assumes participants need to save 12% to 15%, the automatic machinery is built to fall short of the plan’s stated goal.
Loan and hardship access vs. automatic savings gains: Generous loan limits, multiple loans outstanding at once, and easy hardship withdrawals can drain the balances that automatic features worked to build. We covered the mechanics in The Hidden Risks of Plan Loans.
A brokerage window vs. a streamlined lineup: A committee trims the menu for good behavioral reasons, as we discussed in Simplicity Wins, then reopens unlimited choice through a window nobody monitors.
Other conflicts include:
- Inconsistent investment menus
- Mismatches of eligibility vs. workforce reality
- Provisions or features adopted without sequencing
Why Do Well-Run Plans Drift Out of Alignment?
Features are approved in separate meetings, often years apart, sometimes by members who have since rotated off the committee. Recordkeepers promote the tools they’ve built, whether or not your plan needs them. Benchmarking against peers rewards having a feature and usually doesn’t ask if it’s integrated with anything else.
Committee minutes often capture the decision but seldom the design intent behind it, so years later nobody can explain why the escalation cap sits at 10%. Meanwhile, the workforce changes while the plan design stays frozen at whatever year each piece was added.
Interaction Effects Belong in Your Monitoring Process
Procedural prudence reaches well past selecting and monitoring investments. A committee that can explain why the plan is built the way it is, and show that its features were weighed as a system, stands on much firmer ground in a Department of Labor audit or a participant complaint than one holding a stack of individually reasonable approvals. The way features interact is part of the fiduciary monitoring obligation.
A Practical Review Framework
Here’s a straightforward place to start:
- Inventory every feature currently in the plan, with the year it was adopted and the original reason for adding it.
- State the plan’s intended outcome in one sentence: What should a typical participant have accumulated, and by when?
- Map each feature to that outcome as supporting it, neutral, or working against it.
- Look at the pairs: Default rate and match formula, escalation cap and readiness target, loan access and accumulation goals, default investment and advice services.
- Test the design against your own data, such as how many employees contribute enough to receive the full match, loan usage, and how deferral rates are distributed. The numbers usually reveal which features are fighting each other.
- Document the reasoning along with the conclusion, so future committee members understand the design.
Evaluating the Plan As One Design
Fixes that come out of this kind of review are usually recalibrations, such as raising a cap or restructuring a match. Because PlanPILOT isn’t affiliated with any recordkeeper or fund family, we evaluate whether the whole design serves participants, and we have no product of our own that needs a place in it.
Is Your Plan Working As One System? Let’s Talk.
We’re creating the standard for client experience. Independent and impartial by design, we apply our skill to each facet of plan development, governance, and implementation to help your organization and its participants see real results. We’re committed to providing objective guidance, informed innovation, and an integrated approach tailored to your unique objectives.
PlanPILOT’s team of seasoned professionals upholds the highest professional standards, so every strategy we recommend aims to support both your organization and the participants who depend on it.
To learn how we can help your committee review its plan design, reach out to us at (312) 973-4913 or send an email to mark.olsen@PlanPILOT.com.
About Mark
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k), 403(b), and 457 plan sponsors. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, and CUPA-HR.
