The Re-enrollment Blueprint
Optimize Outcomes with Personalized Advice as QDIA
Re-enrollment helps more employees get started saving and gives participants the opportunity to benefit by a personalized advice strategy that considers their unique situation and needs. The Re-enrollment Blueprint includes tools and setup guides to help you communicate the value and process to your clients.
White-label resources, written and produced by iJoin, to be edited and branded by your organization.
Present Re-enrollment to Clients
Presentation Template
This PowerPoint file is set up to be white-labelled for your custom branding.
- Three reasons why you should do a re-enrollment to change your QDIA
- How managed accounts help drive better outcomes
- Investment suitability: why you want to re-enroll into the managed account as the QDIA
- Why do it now instead of later
One-Page Summary
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Sample Investment Suitability Report
This report allows you to compare the current target date fund series that is resident in a plan to the managed account solution of your choice. The report compares each participant’s proper equity exposure when allocated into a personalized managed account versus the single factor target date fund glide path by using an easy-to-read chart. It is designed to help advisors and plan sponsors assess investment suitability in order to optimize retirement outcomes.
This is a sample report only; customized reports can be generated within the iJoin ACT portal.
Supporting Articles & Research
Third-party articles and data supporting the use of managed accounts in retirement plans and positive impact on participants.
Suggested Talking Points
Provide key messaging to help plan sponsors understand the benefits of re-enrolling participants into a managed account as the QDIA
Enhanced Participant Outcomes
Highlight the potential for improved investment returns and reduced risk through professional management.
Increased Participation
Emphasize the positive impact of auto-enrollment on participation rates.
Fiduciary Responsibility
Discuss how offering a managed account as a default option can help plan sponsors meet their fiduciary duties.
Cost-effectiveness
Explain the potential cost savings associated with managed accounts, such as reduced administrative burden and increased participant engagement.
Customization
Showcase the ability to tailor managed accounts to meet the specific needs of the plan and its participants.
Risk Management
Discuss how managed accounts can help participants manage investment risk through diversification and rebalancing.
Q&A
Questions plan sponsors should be asking
How can a re-enrollment help improve our plan’s performance?
- Re-enrollment helps more people start saving for their future by automatically enrolling them if they are eligible.
- Many participants are invested in age-based target date funds. A personalized advice program considers much more about their needs and goals to align risk and return decisions that get automatically updated over time.
- Surveys by leading providers suggest a majority of participants are uncomfortable making their own decisions. A professional managed personalized advice solution addresses this.
- A re-enrollment, used in conjunction with auto-enrollment and auto-escalation, can improve diversification for participants who haven’t touched their asset allocation in years—or who don’t make wise choices when they do touch it.
What is a Qualified Default Investment Alternative (QDIA)?
In 2006, the Pension Protection Act introduced Qualified Default Investment Alternatives (QDIA), a safe harbor allowing plan sponsors to default participants into risk-, age-based, and professionally managed investment options when they do not make their own choices.
What happens to employees who previously opted out of participating in the plan?
In a re-enrollment, employees who are eligible but not participating will be automatically enrolled. This includes those who may have previously opted out. It presents another opportunity to encourage them to start saving for their future.
Is there a cost associated with performing a re-enrollment?
There is no fee to the company for performing a plan re-enrollment. The cost of the managed advice service will be deducted periodically from the accounts of those participating.
What is “managed advice” and why does it matter?
Managed advice refers to a highly personalized, data-driven investment strategy program tailored to the unique situation, needs, and goals of each person. Rather than put every saver on the same investment glidepath based solely on their age, managed advice programs make and adjust asset allocations considering many factors including current savings, contributions, outside assets (as applicable), gender, years to retirement, and state taxation in retirement.
What is the cost of the managed advice program?
Can employees continue to manage their own investments if they wish?
Yes, while many savers appreciate professional help making investment decisions, those who prefer to make their own investment choices may opt out during the notification window before re-enrollment is processed. They may also log in and change their preference at any time in the future if they wish.
How often should we do a plan re-enrollment?
It’s been reported that some experts suggest a re-enrollment every five years. This can be helpful to keeping participants’ asset allocations on track. Talk to your plan advisor about what may work best for your plan.
Do our employees need to take an action for this to work?
No, employees are not required to take any action for a re-enrollment to work or be successful. They need only take an action if they wish to opt out.
How do we communicate our intention to perform a re-enrollment?
Your plan recordkeeper and advisor will provide required notices that need to be shared at least 30 days before and 7 days before the re-enrollment occurs.
What information will employees get about this before and afterwards?
Before the re-enrollment event, your employees will receive at least two notices about why it’s happening, how it may benefit them, when it will occur, and what they can do if they wish to opt out. After the re-enrollment, those who did not opt out will receive a statement summarizing their new investment strategy, goal completion, and information about more positive actions they can take.
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Setup information for recordkeeping teams to accommodate a re‑enrollment process.
Basic Process Overview
How to conduct a re-enrollment with personalized advice as the QDIA
Implementation Guide
Detailed steps on how to set up re-enrollment within iJoin, including screenshots
Employee Communication Templates
These templates are intended to be emailed and/or mailed to employees.
Initial Re-enrollment Notice
The initial communication to participants, giving them advance warning of the upcoming changes.
- May be a short, quick announcement including a timeline of what is to come
- Should highlight the date of the final re-enrollment when the participants funds will be moved into the newly-selected QDIA
- Should also highlight any key dates when participants can no longer make changes leading up to the re-enrollment date
- Should include any education or advice meetings where the participant can learn more from the investment advisor, for example, about the new QDIA option
30-Day Re-enrollment Notice
The required technical 30-day notice to participants, giving them advance warning of the upcoming changes.
- Should include the following: https://www.federalregister.gov/d/07-5147/p-275
- Description of the circumstances under which assets in the individual account may be invested and, where applicable, circumstances for elective deferrals to be contributed on participant’s behalf, the percentage of contributions, and right of participant to elect otherwise.
- Participants rights to direct their own investments, including their ability to direct their investments to other funds and any fees or restrictions for making such as transfer
- Where participants should go for other investment info for the plan (e.g., the 404a5 notice)
- Description of the QDIA, including:
- Description of the investment objectives, risk and return characteristics (if applicable) for the QDIA
- Fees and expenses for the QDIA
Final Re-enrollment Notice
The information provided in the sample communications are for educational and informational purposes only and should not be considered as legal, tax, nor investment advice. They are intended to serve as a sample for general reference only. You should consult a qualified attorney or legal professional for advice tailored to your specific circumstances. This material is for institutional-facing purposes only and should be reviewed and tailored prior to distribution to other audiences, including use with participants.
Compliance
Key considerations to maintain compliance from implementation through ongoing plan management
Expert guidance from Bonnie Treichel, Founder and Chief Solutions Officer of Endeavor Retirement and Partner at Endeavor Law, a law firm dedicated to supporting the ecosystem of financial services with their retirement plan-related decisions, documentation, compliance, and regulation.
- Is your recordkeeping system ready to take on compliant QDIAs, including a re-enrollment process?
- Seven basic conditions that a plan sponsor must meet to obtain safe harbor relief
- Initial Compliance Considerations
- Annual Compliance Considerations
Monitoring and Engagement
Helpful tips for monitoring participant activity and engaging with them through targeted messaging
Monitoring
The status of managed participants can be monitored by those with iJoin administrative rights via the Activities/Managed Accounts section of the iJoin portal. Within the provided view, you can search and filter by specific participants, plans, statuses and key dates. This is particularly useful for re-enrollment scenarios and confirming those that have been defaulted into the managed program within a provided timeframe.
Status Definitions:
- Assigned
Specific to re-enrollments, this status indicates that the participant has been assigned to the relevant re-enrollment period and will now have until the re-enrollment deadline to make an affirmative investment election prior to being defaulted. - Voluntarily
The participant voluntarily opted in to the managed service via the iJoin user experience. - Defaulted
The participant was defaulted into the managed service by way of QDIA or MAP re-enrollment. - Opted-Out
The participant has opted out of the managed service
Engagement
You can utilize the ACT email campaign feature to send messages geared towards participants that are currently in (or out) of a managed service. When setting up a campaign, select the “Is Managed Account Participant” option from the Targeting Criteria drop-down list to send messages to those that are either voluntarily or defaulted into a managed service.
Conversely, you can message those that are not taking advantage of a managed service by selecting the “Not Managed Account Participant” option. This will target those who are eligible in the plan, but do not have a managed status of any kind.
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