As we move into spring many athletes, including my son, begin to prepare for the baseball season. A lot of preparation goes into baseball. Such as going to the batting cage to get some practice in before the season even starts and finding the perfect bat. Before having a son in baseball, I did not realize how important it is to have the right bat. The size of barrel, length and weight of the bat all play a factor in having a successful baseball season. However, the key is the sweet spot, the location on the bat that provides the best chance of hitting the ball out of the park, for a home run or better yet a GRAND SLAM.
Cover your bases
Think of sponsoring a defined contribution plan as similar to baseball. Think about the bases and what is suggested to maximize successful retirement outcomes:
- On first base: You first need employees to participate. A goal for employers is to challenge at least 90 percent of their employees to participate in the retirement program.
- On second base: You need adequate savings levels. Did you know that employees may need to save on average at least 10 percent of their pay plus employer contributions over their entire working careers (ages 25-65) to have enough income in retirement? 
- On third base: You need a well-diversified portfolio. Aim for at least 90 percent of employees to be invested in diversified investment options.
Get more players in the game
Just like the perfect bat, plan sponsors need a perfect plan design and employee momentum to successfully load the bases and hit their grand slam. The Principal® PlanWorks plan design is a strategy to help plan sponsors toward finding their sweet spot by using certain plan features that work together for retirement savers instead of against them. This strategy includes:
- Automatic enrollment for existing and new employees starting with at least 6% elective deferral default and then use automatic escalation on an annual basis of at least 1% until the rate is at least 10% of pay. 
- Re-sweep employees who have opted out of the plan or are not saving at the automatic enrollment default. Our research shows that participation rates increase significantly and that 91% of employees will participate in the plan when automatic enrollment is implemented.
- Stretch the match formula to encourage employees to defer at higher levels to get the full employer match while managing overall employer contribution costs.
- Naming a diversified investment option as the qualified default investment alternative (QDIA). Many participants do not have the know-how or time needed to choose appropriate investments for their retirement savings 
Employing these strategies may provide employers with a grand slam and drive participants who may be on first, second and third base home toward retirement readiness.
Consider using the Principal® PlanWorks strategy for plan design to help your employees become retirement ready. Contact your financial professional or representative from the Principal Financial Group® for more information.