Which elements are crucial to the design of a 401(k) plan?

The elements crucial to the design of a 401(k) plan include the level of employer contributions and investment options. Employer contributions can significantly influence employees' participation and savings behavior, as more generous matching contributions may encourage higher participation rates and contributions among employees. Additionally, the variety of investment options available within the plan plays a critical role in employee engagement, as individuals often seek choices that align with their investment goals and risk tolerance.

By ensuring a well-structured contribution system and a diverse range of investment options, the plan becomes attractive to employees, facilitating their long-term retirement savings and helping them meet their financial goals. While other factors, such as participation rates and employee feedback, are valuable for assessing and improving the plan, they do not fundamentally shape its initial design in the same way as employer contributions and investment choices do.