In Step #6 of “The Essentials” we reviewed some of the metrics that can be used to assess the value that a Service Provider is adding to participants. From a “How does a participant benefit?” perspective we now want to take a more granular approach.
We believe that simple changes can lead to dramatic results. So, something as simple as a Service Provider motivating a single participant to take action can have a meaningful impact on that participant’s retirement. Let’s take a look at one example:
|Change in Participant Behavior||Baseline Dollars||Post Change Dollars|
|Increase Deferral from 6.0% to 7.2%||$286,111||$324,259|
That is a change of $38,148 for that one participant. Now what happens if that Service Provider is able to motivate 10, 100 or 1000 other participants? The result is a dramatic increase in the participants that have a better chance at retiring comfortably. This is a situation where the Plan Sponsor, the participants and the Service Provider are all winners.