Smart Plan Design: A Powerful Way to Reduce Benefit Costs

MARCH 3, 2026

In today’s competitive labor market, employers are enhancing benefit programs to attract and retain top talent, while also looking for smarter ways to manage total employee benefit costs.

Retirement plan design is an often-overlooked area that can significantly improve employees’ ability to retire on time — a factor that directly impacts workforce productivity and long-term benefit costs. Reviewing your current retirement program provides an opportunity to ensure your plan design aligns with your organization’s culture, workforce needs, and business goals.

Key Plan Design Considerations

Employers are under increasing pressure to offer a retirement program that’s competitive, improves employees’ retirement readiness, and sets the organization apart from others when recruiting or retaining employees. With these goals in mind, employers should consider these key components of retirement plan design:

• Automatic enrollment and escalation to increase savings rates
• Employer matching contributions that encourage higher participation
• Safe harbor and qualified nonelective contributions to ensure highly compensated employees can contribute fully
• Nondiscrimination testing considerations and how to avoid corrective refunds
• Profit-sharing strategies, including enhanced options such as new comparability for greater flexibility
• Alternative plan designs, such as defined benefit and nonqualified defined contribution plans, to address leadership or retention needs
• Student loan match contributions under SECURE 2.0 Act (IRS Notice 2024-63), which is a new feature to help employees pay down debt while saving for retirement
• Integrated health and retirement benefits strategies to reduce tax liability
• Vesting schedules, which can influence both retention and employer cost

For organizations that offer a pension plan, current market volatility and interest rates require a careful review of the plan’s funded status and long-term strategy to determine whether freezing or terminating the plan is a prudent option.

Plans That Fit for Today and Tomorrow

USI Consulting Group (USICG) provides retirement plan design consulting that helps organizations evaluate marketplace competitiveness and develop a retirement program that fits today’s needs while remaining flexible for future growth.

Our plan design experts bring together behavioral finance insights and employer contribution analyses to help employers create cost-effective plans that support participants in reaching retirement goals. Through the process, USICG provides benefit and cost modeling that includes alternative contribution formulas — helping employers understand both the participant impact and the financial implications of design decisions.

Our proprietary benchmarking review is the first key step in the process. It compares your plan against relevant competitors’ plans and industry averages. This review leverages our database to benchmark and analyze required plan services and fee competitiveness. We identify the pros and cons and quantify relative costs to help you understand your options, and we build in as much flexibility as possible so that your plan can easily adapt as your business grows.