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July 2021   

The “Ideal” 401(K) Plan Design – Concepts To Increase Retirement Readiness For Participants And Decrease Fiduciary Liability

While there is no single "Ideal" 401(k) plan design that is right for every plan sponsor, this paper explores two overarching plan design themes that can be incorporated into every 401(k) plan in some way that make a particular plan sponsor's 401(k) plan "Ideal" for it and its employees. Those plan design themes are: (i) retirement readiness for employees/plan participants; and (ii) protection for the plan sponsor and plan fiduciaries from claims associated with the plan's investments. This paper will focus on plan design elements that, if properly utilized, should increase participants' financial preparedness for retirement and decrease the potential for liability on the part of the plan sponsor and plan fiduciaries with respect to the plan's investments.