Strategic planning approaches for plan sponsors

Plan Sponsors may have initially discarded strategic planning concepts because the most common approaches may seem to be an inappropriate fit for benefits planning alone. But strategic planning can help ensure that benefits do not become erratically offered and changed.

No official survey needed –post-pandemic, post-SECURE and CARES act, post-Great Resignation - most plan sponsors are considering making changes to their retirement benefits plans. Eagerness to tackle that task may fade when faced with the usual approaches to planning those changes and implementation. This may be the right time to consider a new approach to strategic planning.

Before we jump into new strategic planning models, it’s worth noting that since last year, the Department of Labor has been working on a new rule concerning ways to improve the information plan participants receive. The new rule, titled “Improving Participant Engagement and Effectiveness of ERISA Retirement Plan Disclosures” is aimed at finding ways to balance costs to plans and plan participants with improving the effectiveness of the disclosures participants receive. This work includes gathering stakeholders like participants, but also plan service providers and querying them about the content, design and delivery of the disclosures. This new rule making, though announced in the Fall of 2021, is still not yet final. That means the Department of Labor is still gathering data. Plan sponsors may want to keep an eye on these proposed changes.

Changes to employee benefits may be a small part of an overall organizational strategic plan. It may seem odd, then, to consider strategic planning a benefits change. But a review of the different models of strategic planning may help plan sponsors consider how to structure the process of changing plan documents. ““It is easy to create and communicate a vision, but the strategic planning process makes or breaks the actual execution, achievement or realization of that vision.”

Whether you and your department want to change your plan to increase employee participation and include new benefits, like those that help employees with student loans, approaching your IRS-required annual review with a fresh approach can be helpful.  This article will address changes to defined contribution plans only. For information on defined benefit plans, have a conversation with one of our advisors.

In any strategic planning process, the project leader will need to include those items that have to be reviewed. For plan sponsors this includes the IRS Operational Compliance List (for 401(a) and 403(b) plans.[1] The IRS also suggests that plan sponsors review the options selected in an adoption agreement (for pre-approved plans). Those options include eligibility time periods, types of contributions, vesting and payment of benefits. The IRS also suggests annually reviewing service agreements to ensure that your plan documents reflect changes in the law, any testing required has been (or will be) run, all Department of Labor forms are on schedule and will be run, and records are continuing to be kept in an appropriate manner.

It may be that benefits programs are a part of a larger plan, since Post-Pandemic, Post- Great Resignation, the issues around benefits and recruitment may overlap. Plan Sponsors may have initially discarded strategic planning concepts because the most common approaches may seem to be an inappropriate fit for benefits planning alone. But strategic planning can help ensure that benefits do not become erratically offered and changed. Plan sponsors may want to consider one of these additional approaches.

  • Scenario-based. This is a process that works well for evaluating regulatory and demographic changes. This process looks at each change in force and evaluates a best case and worst-case scenario. Action plans then are developed to address each scenario. This approach can be used on an organization-wide scale of planning, but it works well for departmental level planning. Scenario planning involves examining the variable elements of your environment, evaluating them for plausibility and impact, and factoring those scenarios that are most relevant into your decision-making.
  • Balanced Scorecard. This approach takes into account your objectives, measures and initiatives. Objectives are high-level organizational goals and measures. Measures help you understand if you’re accomplishing your objective strategically. Initiatives are key action programs that help you achieve your objectives.
  • Gap planning. This approach works well for addressing specific internal deficiencies in working within a larger framework. It is also referred to as a “Need-Gap Analysis,” “Need Assessment,” or “the Strategic-Planning Gap.” It is used to compare where an organization is now, where it wants to be, and how to bridge the gap between. Gap planning often creates a change agenda or shift chart rather than a strategic plan. These charts can help organize a cross-functional team.
  • OKRs (Objectives and Key Results). This planning approach looks to alignment and engagement around measurable goals by clearly defining objectives and key results. It is used by Google, Intel, Spotify, Twitter, LinkedIn. It focuses on the roles and processes, which may be especially helpful in benefits planning.
  • Hoshin Planning. Similar to OKRs, the Hoshin approach focuses on goals and aligning them with specific projects with an eye towards maximum coordination. It mixes a top-down approach with a bottom-up approach to ensure maximum alignment. The end result is a Hoshin Planning matrix where objectives, measures and targets and action items are visually tracked.

Those that may be suggested but aren’t appropriate include: Blue Ocean Strategy , which helps organizations to develop in “uncontested market space” (e.g. a blue ocean) instead of a market space that is either developed or saturated (e.g. a red ocean); The VRIO framework, also examines marketplace threats and focuses on the value, rarity, imitability, organization of an organization; The Baldrige Approach is focused entirely on performance results; and the Ansoff Matrix looks only at market penetration and development as compared to product development and diversification.

Other suggestions from planning experts include making sure that the team works in a collaborative way. That includes using a shared workspace that allows the team to connect and share information. “Visual tools and dashboards accelerate the process of defining objectives, budget, funding, resources, schedules, and actionable plans.” These tools may include a strategy map is a visual tool designed to clearly communicate a strategic plan and achieve high-level business goals. Also


These articles are prepared for general purposes and are not intended to provide advice or encourage specific behavior. Before taking any action, Advisors and Plan Sponsors should consult with their compliance, finance and legal teams.

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