We’ve all seen the show where celebrities from various walks of life team up with professional dancers who coach them through enough ballroom basics to compete on national TV. While the top contenders undoubtedly have some advantages—natural athleticism, past dance experience, or a strong work ethic—none of them could have learned so much so quickly without a professional by their side.

When it comes to small- and mid-sized retirement plans, a professional partnership can be just as important. Many small-business owners, stars in their respective fields, rely on trusted financial advisors and third-party administrators to help manage their plans.

When we started Vanguard Retirement Plan Access™ in 2011, it was with the value of key partnerships in mind.

A little support goes a long way

Vanguard Retirement Plan Access works closely with plan sponsors and financial professionals to help small- and mid-sized businesses offer effective employee retirement plans. In the six years since our inception, we’ve served more than 8,000 retirement plans with more than 290,000 participants.

That growth is at least partially attributable to the recognition that tapping into the expertise of financial partners can have meaningful benefits across the board—for advisors and administrators, and for plan sponsors and plan participants.

Even simple guidance on issues like plan design can have far-reaching benefits. Vanguard research shows that a growing number of small businesses are changing plan features in ways that significantly improve plan participation and participant accumulation.

How America Saves 2017: Small business edition, which examined more than 1,900 retirement plans, found that 15% of small-business plans use autoenrollment. Plans with autoenrollment have an average participation rate of 82%, which is significantly higher than the average of 57% for plans with voluntary enrollment. This difference is even more pronounced among employees with lower incomes. Those making less than $30,000 are more than twice as likely to participate in the plan if automatically enrolled.

Plans that autoenroll may be able to further increase accumulation by setting higher default contribution rates. How America Saves suggests that participants are receptive to, and may actually prefer, higher contributions since participants who voluntarily enroll set an average deferral rate that’s 28% higher than the average default deferral of those autoenrolled. Further, the report found no meaningful “quit rate” for participants who are defaulted into higher deferral rates.

In addition to reviewing plan design, professional partnerships can also help reduce administrative burdens, keep track of compliance requirements, evaluate investment options, and ensure sponsors have the resources they need to make fully informed decisions that align with their business goals and serve the best interests of their employees.

With the right support, going one step further

Vanguard Retirement Plan Access helps financial professionals and plan sponsors manage the complexities of retirement plans by providing low-cost investments and high-quality recordkeeping—all for a low all-in cost. Plan sponsors and financial advisors can work directly through us or through a plan’s third-party administrator.

Whether it’s guidance on advanced plan design, such as best practices and input from ERISA attorneys; education materials, including plan sponsor and participant websites; or in-depth investment information and analysis, we offer the resources to support plan sponsors and their financial professionals.

In ways like this, the right partners can make a significant difference, giving plan sponsors a “leg up” in making decisions that result in well-designed and smoothly run plans, which then set the stage for employees to successfully prepare for retirement.

Source: How America Saves 2017: Small business edition. The Vanguard Group, 2017.