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What’s in a (Plan) Name?

“What's in a name? That which we call a rose by any other name would smell as sweet.”

In Shakespeare’s timeless love story, Juliet’s romantic plea to Romeo to relinquish his Montague family name was so convincing that he responded, “Henceforth I never will be Romeo.” In one of the most successful sales pitches ever, Juliet convinced Romeo that the names of things actually do not matter. She convinced Romeo that it is only what things actually are that matters — not their names.

So let’s think about this in the context of retirement plans, and the industry’s historic use of qualified plan names. The plan name is one of the first items we need to input when creating a new plan, is very close to the top of the Form 5500 every year, and appears on every participant statement and communication. But does it actually matter?

Here is where I must agree with our love-struck Juliet: I would venture most retirement industry professionals, plan sponsors and — most importantly — millions of U.S. retirement plan participants would also agree. The plan names that we have been using for all these years actually may not matter.

Plan names have not been given much thought by plan sponsors or the ERISA attorneys, TPAs or record keepers that help plan sponsors create their plan documents. For years, we have named retirement plans using some generic mixture of a tax code sections and technical jargon, and subsequently have seen those plan names ignored completely by plan participants and plan sponsors. Today, all of us are just looking right over the words used to describe the plan name. This needs to stop. The "Plan Name" field is too valuable to be ignored.

If we are going to be honest with ourselves, does ignoring names work out in the end? How did it work out for Romeo and Juliet? How has ignoring plan names worked out for participants? Remember what Juliet said. What matters is what these plans actually are. Qualified plans are savings and investment vehicles to help people prepare wisely for a better retirement. If that is what they are, why don’t we just call them that? Why are we spitting out technical terms like “ABC Widget Company 401(k) Plan” to sponsors and participants when we don’t have to?

Call to Action

Here is where I think we are all missing an opportunity to easily drive better participant engagement, and ultimately better behaviors and outcomes. What if we all starting working with plan sponsors to see if renaming their qualified plan makes sense? A potential (and practical) time to execute this type of amendment would be during the next mandatory restatements in 2014, or during a provider switch in the next year or so.

A change in a plan name can reenergize a plan around its ultimate purpose: the retirement readiness of plan participants. Therefore, plan sponsors should consider using words in a plan name that can inspire employees and employers and engage them to do more with their plans.

We should all encourage each other (plan sponsors, investment managers, record keepers, TPAs and advisors alike) to use the “Plan Name” field more strategically to really start emphasizing retirement readiness. This means having the courage to amend plans to no longer be the standard and boring “ABC Company 401(k) Plan” but rather something more powerful, like the “ABC Company Retirement Readiness 401(k) Plan.”

This new plan name will then filter out in to everything — the 5500, Summary Plan Descriptions, enrollment forms, education materials, websites and everywhere else the plan name is mentioned. It’s like hitting the reset button on the plan and marketing it to employees in a whole new way, with one simple change of words in a field that people have long ignored.

So, what words will you use for the plan name when you fill out that next round of paperwork?  When will you have your first conversation with a plan sponsor about this? My hope is that it is today, and that we can all work together to share new ideas that make a difference.

Daniel Long, QPFC, is Division Vice President—Central Region, Emerging Markets, at Transamerica Retirement Solutions. He can be reached at [email protected].

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