For Financial Professionals in the US

Plan Talk: Best of 2022

In this episode of Plan Talk, Retirement Director Ben Rizzuto looks back on 2022 and discusses noteworthy stories and trends that impacted the retirement plan industry last year.


Ben Rizzuto, CFP®, CRPS®

Ben Rizzuto, CFP®, CRPS®

Wealth Strategist

Jan 4, 2023
16 minute listen

Key takeaways:

  • Personalization and peer-to-peer education are two best practices that can help educate participants on plan design features and help make sure they are engaged.
  • New research conducted in 2022 found significant differences in how different generations view retirement. The findings can help plan sponsors better understand the goals and concerns participants are likely to be focused on depending on their age.
  • In the legal realm, Northwestern University’s retirement plan case, which was heard by the Supreme Court last year, has important implications for including actively managed funds in plan lineups.


This information is not intended to be legal or fiduciary advice or a full representation of all responsibilities of plan sponsors and financial professionals.

Ben Rizzuto: From Janus Henderson Investors, I’m Ben Rizzuto, and this is Plan Talk.

Happy New Year, everyone! We’ve begun a new year, but before we dive head-long into 2023, I’d like to take this opportunity to review 2022. It’s always a good idea to review what worked, what didn’t, and where you can make improvements. And, as I’ve done in the past, I want to do the same by highlighting some of my favorite stories from the retirement plan industry from last year.

These are stories and ideas I have consistently talked about with plan advisors and plan sponsors to help them improve their plans, think about new ways to engage with participants, or better meet their fiduciary duty. Many of them come from our Top DC Trends and Developments guide, which we put out on a quarterly basis and, as I always say, allows those who read it to keep their finger on the pulse of that which is going on at the plan, participant, legal, and regulatory levels.

Quarterly highlights

I’d like to start with a few ideas and best practices we’ve seen from plan sponsors over the course of the year.

Personalization may be the way to a plan participant’s heart, but we can’t get to a participant’s heart if they are totally lost when navigating their company’s retirement plan. A New Jersey-based company by the name of RWJ Barnabas found exactly that when they surveyed their participants.

To help, the company launched a customized intranet site called MyRetirement that is personalized to match the needs of three employee groups the organization identified as “avoiders,” “late bloomers,” and “motivated savers.”  The site features quizzes, articles, videos, and fun facts that are specific to the three “personas” that emerged from the company’s research. They then doubled down on the site by sending participants quarterly email nudges specific to each of the three groups.

Late bloomers — those identified as nearing retirement who were either catching up on their savings or seeking answers to critical questions — for example might receive an email nudge containing articles on why it’s not too late to still save some money.

Motivated savers — participants under 50 juggling multiple competing priorities — on the other hand, might receive nudges on how to prioritize their finances, while the avoiders — disengaged participants who persist at the auto-enrollment contribution rate of 3% — might receive information explaining the advantages of pre-tax contributions.

In my mind, if plan sponsors study their participant population, they can probably find characteristics and behaviors that are held by different pockets of participants. These similarities can help develop these personas. I think the development of personas is great because they allow participants to say, “that sounds like me,” and they are easier to implement for plan sponsors versus complete personalization for each participant.

Another way for plan sponsors to create this lightbulb “hey, that sounds like me” moment for participants is to leverage employees themselves in their educational content. The Missouri State Employees’ Retirement System did this by creating 15 TikTok-style videos to help participants learn more about the state’s deferred compensation plan, save for the future, and improve their financial wellness.

The videos featured only Missouri state employees — and in some cases their spouses or children — which helped make the 30-second videos more engaging as participants searched for people they knew.

For example, the “What’s an Emergency Fund?” video went viral and was one of the biggest crowd-pleasers since it featured two little girls giving simple savings tips.

So not only does personalization help, but so does peer-to-peer education that is fun and quick.

Finally, one last story that highlights two incredibly important questions that plan sponsors need to be asking themselves. The story was from our third-quarter Top DC Trends guide and was about a company called CareerSource. This is a company that has made sure its plan continues to evolve so employees know that the organization is really investing in them. They do this by making sure they ask themselves, “What else could we be doing?” on a consistent basis. This has led the company to increase its auto-deferral rate and simplify its matching formula over the years.

The other important question they considered was, “How do we want to define success?” In this company’s case, it was to have participation at 90% or greater, average deferrals at 10% or greater, and have participants be able to replace 80% or more of their pre-retirement income.

This is so important, because if plan sponsors don’t come up with an answer for this question, “what does success look like?”, then they won’t be able to figure out what plan design features to implement to help participants get there, how to educate them on those features, and then how else to make sure participants are engaged.

Participants’ corner

As we think about how to engage with participants, it’s important to understand who they are, where they are, and what they are worried about.

There was a great survey from Schwab that came out in 2022 that found several key differences. The Retirement Reimagined survey provided some wonderful insight on both the drivers of happiness and values in retirement across Millennials, Gen X and Boomers. More specifically, it provided profiles for Millennials, including both financial and attitudinal factors, plus a vision for the future of retirement to help investors plan ahead as they rewrite the traditional rule book for retirement.

The survey helps us answer the question of, “What might Millennial retirement look like?”

The answer: Travel will continue to be a top priority for the next generation in retirement, with Millennials less likely to own a permanent home than Boomers. Flexibility and a desire for new experiences will lead Millennials and Gen X away from stereotypical and sedentary retirement pursuits.

With less of a focus on a specific nest egg amount, Millennials and Gen X will think of savings and investing as a path to more flexibility and freedom. And, as economic and societal trends shift, uncertainty will cause the next generation to focus on digital investments and shorter time horizons, even in retirement.

The survey also provides some excellent tips for younger investors as they plan for the future. For example, it reminds them to picture retirement as a target financial state, not a date. Retirement isn’t really a switch you flip at a certain age anymore – it’s a financial state that allows for the flexibility to make work optional. Either way, people need to crunch the numbers and start saving to ensure they’ll have the nest egg they want, whenever they decide to crack it open.

Another great reminder for younger investors is that FOMO (Fear of Missing Out) is not an investment strategy. Young people need to remember that investing is about growing their money over time so it can help them live the way they desire, not about speculating or chasing the latest investment trend.

The study also predicts that Millennials will likely fall into four distinct retirement personas by 2050, when a large portion of them are shifting to retirement.

For example, “Relaxed Minimalists,” who will make up approximately 31-41% of future retirees, are seen as those who are equally satisfied by the company of their close-knit inner circle and the simple pleasures of their day-to-day routines. They will value deep relationships more than other personas. They will place less focus on finances and devote more time to hobbies, relaxation, and me-time.

So, if we know what participants will look like, what they’ll be focused on, we can then help them get there, or build plans that help everyone involved.

Knowing what participants are focused on or worried about is important, but we also need to better understand how to educate participants. An interesting paper entitled “Reducing Saving Gaps Through Pennies Versus Percentage Framing” helps us better understand that idea and may help us get participants to save more.

Generally, when enrolling in a workplace savings plan, most people today are tasked with choosing a retirement savings rate that is displayed as a percentage of their total paycheck. However, broader research suggests that a large number of individuals struggle to calculate percentages – a challenge that becomes concerning when seeking to choose a rate that will help define one’s retirement savings.

To help workers better understand the benefits of saving for retirement, this study reviewed what would happen if, instead of featuring a worker’s savings rate as a percentage, it was described in terms of pennies-per-dollar earned. For example, a 7% savings rate would be expressed as saving “7 pennies” for every dollar earned.

The study found that workers in the percentage condition had an average savings rate of 6.9%; whereas those in the pennies condition had an average savings rate of 8.0%, and that this change in information architecture had a significant impact on savings behavior, especially for lower-income workers with an average income of $32,000.

Finally, from a more tactical standpoint, one other survey from Schwab showed us exactly what investors want help with from plan sponsors and advisors. In a nationwide survey of 401(k) participants, they found that workers ranked inflation as the biggest hurdle to a comfortable retirement, ahead of keeping up with monthly payments (35%), stock market volatility (33%), and unexpected expenses (33%).

It was also found that plan participants are most interested in receiving professional help with investing their 401(k) accounts, calculating how much to save for retirement, and creating an income stream in retirement.

So, there you have a number of things to help you understand who participants are, what they may need, and how to better communicate with them.

Legal review

Fiduciary responsibility is something we consistently talk about, and one final idea that I’ve talked about a lot about last year and has seen significant coverage was Northwestern University’s retirement plan case being heard by the Supreme Court and the subsequent fallout from its decision.

First, remember that the U.S. Supreme Court unanimously ruled on January 24, 2022, to reverse and remand for reconsideration the Seventh Circuit’s decision in Hughes v. Northwestern University. The Supreme Court held that the Seventh Circuit erroneously focused on a component of the duty of prudence that requires a fiduciary to offer a diverse menu of options, when it should have applied the standard articulated in Tibble v. Edison.

The reference to Tibble v. Edison is important for plan sponsors because it reminds them that they have a continuing duty to monitor and possibly remove investments from the plan within a reasonable time.

Since then, we have seen aftershocks as the Supreme Court’s decision in the Northwestern University case has affected a number of plan sponsors. Three such plan sponsors are CommonSpirit Health, TriHealth Incorporated, and Oshkosh Corporation.

Each of these cases was dismissed and, in doing so, the courts provided other plan sponsors with some important guidance. For example, in the CommonSpirit case, the court noted that actively managed funds represent a common fixture of retirement plans, and “there is nothing wrong with permitting employees to choose them in hopes of realizing above-average returns over the course of the long lifespan of a retirement account—sometimes through high-growth investment strategies, sometimes through highly defensive investment strategies.” The court also recognized that actively managed funds cost more than passively managed funds, but that fact alone does not make active funds imprudent.

Along with that, in the Oshkosh case, the court found that the fact that the actively managed funds in this plan’s menu charged higher fees than index funds was not enough to state a claim since the actively managed funds may produce higher returns, and the court noted the 2009 Hecker v Deere case, which set forth the idea that “nothing in ERISA requires every fiduciary to scour the market to find and offer the cheapest possible fund (which might, of course, be plagued by other problems).”

While these decisions don’t mean plan sponsors can relax as far as their fiduciary responsibility goes, I believe they do provide a bit more leeway when putting together a diverse lineup of funds as long as plan sponsors have good processes in place that ensure consistent oversight of those menus.


So, there you have it – a few of the stories that I found myself going back to again and again. Of course, these are just a few of my favorites. There were so many other topics and ideas that we’ve covered, but my hope is that these ideas help you connect with those that you work with, whether it be plan sponsors, investment committees, or participants.

Remember that all of these stories and others are available in our Top DC Trends and Developments guide, so if you’d like to get a copy of the guide or have questions on the specific items I covered today, let me know.

In 2023, we’ll continue to provide these updates, ideas, and best practices in this podcast and through other defined contribution resources, so be sure to subscribe. And if you’d like to discuss these topics or anything else, feel free to reach out. I’d love to hear from you.

So, until next time, I’m Ben Rizzuto and you’ve been listening to Plan Talk from Janus Henderson Investors.

The opinions and views expressed are as of the date published, are subject to change and may not reflect the views of others in the organization. They are for information purposes only and should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy, sell or hold any security, investment strategy or market sector. There is no guarantee that the information supplied is accurate, complete, or timely, nor are there any warranties with regards to the results obtained from its use.

Ben Rizzuto, CFP®, CRPS®

Ben Rizzuto, CFP®, CRPS®

Wealth Strategist

Jan 4, 2023
16 minute listen

  • Personalization and peer-to-peer education are two best practices that can help educate participants on plan design features and help make sure they are engaged.
  • New research conducted in 2022 found significant differences in how different generations view retirement. The findings can help plan sponsors better understand the goals and concerns participants are likely to be focused on depending on their age.
  • In the legal realm, Northwestern University’s retirement plan case, which was heard by the Supreme Court last year, has important implications for including actively managed funds in plan lineups.