If you’re a retirement plan sponsor, why should you care about plan design? Retirement plan design is one of the most underappreciated facets of the retirement plan business and it really should be appreciated. The reason why it should be appreciated is because it can help you maximize and better utilize employer contributions, which are used for tax deductions.

If you’re a plan sponsor with ample resources to make contributions to yourself an your highly compensated employees, a good plan design can allow you and your highly compensated employees to get more in employer contributions than you could if you had a third party administrator (TPA) that didn’t understand the beauty and science of plan design.

Sometimes plan design isn’t enough to maximize employer contributions and sometimes you may need another retirement plan like a cash balance plan or defined benefit plan to work with your 401(k) plan to do the trick.

So when you look for a TPA to hire, someone who is an expert at retirement plan design is someone you need.