In retirement plan design, after establishing eligibility and vesting, what is the next step?

In retirement plan design, after establishing eligibility and vesting, what is the next step?

• A. Set contribution levels.
• B. Educate participants.
• C. Select investments and safe harbors.
• D. Monitor and revise.

Answer: (C)

After eligibility and vesting are set, the next step is to determine how the plan will operate on the investment and compliance side by selecting the investment options and deciding on safe harbor provisions. Choosing investments establishes what options participants can choose from and aligns with the plan’s investment policy and goals, shaping long-term outcomes for participants. Safe harbors are features that simplify compliance with nondiscrimination rules and can influence how contributions are structured, helping the plan pass tests and manage costs. This combination defines the plan’s framework before moving on to how contributions will be set and communicated, and before ongoing administration, education, or revisions.

After eligibility and vesting are set, the next step is to determine how the plan will operate on the investment and compliance side by selecting the investment options and deciding on safe harbor provisions. Choosing investments establishes what options participants can choose from and aligns with the plan’s investment policy and goals, shaping long-term outcomes for participants. Safe harbors are features that simplify compliance with nondiscrimination rules and can influence how contributions are structured, helping the plan pass tests and manage costs. This combination defines the plan’s framework before moving on to how contributions will be set and communicated, and before ongoing administration, education, or revisions.