Russell Investments issued on Thursday a list of 11 best practices for defined-contributions plan sponsors. The report, "11 for 2011: 11 Actions Designed to Improve Your Defined Contribution Plans in 2011," was authored by Josh Cohen, defined contribution practice leader for Russell, and Ben Jones, director of defined contribution.

“Many private sector workers rely on their defined contribution plans as the most significant means of retirement provision, so plan sponsors have a responsibility to identify current best practices and consider them carefully,” Cohen said in a press release. “Russell’s priority list for 2011 gives plan sponsors a roadmap for incorporating the very latest ideas into their defined contribution plans so they can more effectively assist plan participants in achieving the long-term goal of financial security throughout retirement.”

1.       Evaluate and confirm your plan’s company match formula. Russell cites data from which shows 50% of workers say their company's match is the reason they contribute to their retirement plan.

2.       Harness the power of automatic features. Automatic enrollment and automatic escalation are increasingly popular. Russell suggests sponsors who aren't using these tools document their reasons why. If they are, sponsors should re-examine how they're structured: how many and what kind of employees can participate? At what rate are contributions escalating?

3.       Streamline the plan’s investment menu. Too many choices is confusing to participants and places a greater fiduciary burden on plan sponsors, Russell writes. Investment options should be tailored to participants' needs.

4.       Demystify the “date debate.” Russell writes, "Target date strategies differ in terms of equity allocations at the point of retirement and beyond. This 'Date Debate' is often labeled 'To vs. Through,' but this doesn’t help you determine which target date strategies will help your participants meet their objectives." Sponsors should review target-date strategies periodically as volatility, innovation and legislation may force changes.

5.       Consider adding alternative asset classes to target date strategies. Russell suggests taking a long-term approach to adding alternative assets as a means to adding diversification to participant portfolios.

6.       Choose best of breed investment managers. Sponsors should offer options from a variety of providers and managers. "No investment manager is best in class in every asset class," Russell cautions.

7.       How stable is your stable value fund? Stable value funds haven't been immune to the effects of the recession, Russell writes, and wrap contract providers' concerns have led to shrinking wrap capacity, rising wrap fees and yield-limiting restrictions.

8.       Understand and evaluate fee information. Plan sponsors should re-examine fees, and look for ways to use scale to benefit participants, Russell suggests.

9.       Choose financial literacy over investment education. Russell suggests focusing on the "emotional connection" between savings and participants' ideal standard of living in retirement to motivate them to save more.

10.    Keep an eye on Washington D.C. This is a bit of a "no-brainer," but Russell notes that there may occasionally be opportunities to lobby Washington for reasonable regulations.

11.    Revisit retirement income solutions. Russell recommends turning the retirement conversation away from products and focusing on the process. Develop a retirement income philosophy and work to understand participants' needs.