At Chao & Company, we believe the optimal plan outcome cannot be achieved unless the needs of both the Plan Sponsor and the Plan Participants are taken into consideration in plan design. That’s why we start by ensuring the plan’s objectives are clearly articulated, then turn our attention to providing better outcomes and better solutions.

Focus on Better Outcomes

For too long, advisors have been focusing on investment return and picking “backward looking” best of breed investment choices that have delivered the highest returns. This emphasis we believe is misplaced. The purpose of any retirement plan should be to optimize the probability for as many participants to reach retirement with a reasonable “real” income replacement ratio for life, which requires a detailed look at the demographic makeup of the Plan.  We believe an emphasis on income replacement is far more important than attempting to realize the highest return year after year.

The greatest fears for retirement readiness are failing to meet the asset goal at retirement, living longer then retirement savings can support, and purchasing power erosion during retirement.  The biggest factor that causes employees to fall short of retirement readiness is not because the plan failed to offer the highest return investment choices but in fact a lack of sufficient savings.  Even the best investments cannot overcome the lack of systematic savings over a lifetime. 

Behavioral economics has repeatedly demonstrated that most investors are not rational and tend to buy high and sell low.  Caught between fear and greed, most investors tend to chase past winners and fads to their detriment.  Plan sponsors should take note and emphasize retirement savings to help employees be better savers. 

Focus on Better Solutions

Broad, thoughtful, and sincere conversations with our clients form the foundation from which we build and counsel. There is no room for preconceived ideas. Rather, a consultative, customized approach is taken to develop solutions that meet clients’ goals, objectives, and expectations. This depth of process results in a focus on solutions, not products.

Our process is to review, analyze and execute a plan focused on meeting the desired outcomes of our Plan Sponsor clients, and strategies are developed for each component of the plan:

  1. Employer Contribution Strategy
  2. Employee Deferral Strategy
  3. Enrollment and Participation Strategy
  4. Education and Communication Strategy
  5. Terminated Employee Distribution Strategy Participant Loan Strategy
  6. Plan and Fee Investment Expense Control Strategy
  7. QDIA Evaluation and Selection Strategy