401(k) plan design is the set of choices that decide what your plan can actually do: which funds it can hold, whether it offers open architecture, and whether high-balance savers can use a PCRA. The plan you were sold and the plan you could build are often very different things.
Most owners never designed their plan. They accepted one. A provider proposed a menu, a fee schedule, and a set of features, and the plan went live on those terms. 401(k) plan design is the act of asking a different question: not what the provider offers, but what your people actually need the plan to do, and whether it is built to do it.
The Plan You Were Sold Versus the Plan You Could Build
401(k) plan design covers the choices that decide a plan’s reach: which funds it can hold, whether it runs on open architecture or a closed proprietary menu, and whether high-balance savers can access a self-directed brokerage window. A closed menu limits everyone to the provider’s shelf. Open architecture opens the whole market, which usually means better funds at lower cost.
Two design features deserve particular attention, and both sit inside our 401(k) advisory practice:
- Whether to add a PCRA, a self-directed brokerage window, to your plan
- How a deferred compensation plan can sit alongside the 401(k) for key people
- How design connects to the education that helps employees use it well
How Holland Capital Approaches Design
We start from the people, not the product. Who uses this plan, what do they earn, and what do the owners and senior staff need that a basic menu cannot give them? From there we favor open architecture so the lineup can hold low-cost funds, and we evaluate whether a PCRA earns its place for higher-balance participants. As broker of record, we can open and manage PCRA accounts directly, a capability that a closed, bundled arrangement rarely supports. Guided by Preserve. Strengthen. Grow.™, design is about fit, and a well-built plan also eases the oversight burden by keeping costs and choices clean.
When markets get volatile, clarity matters.
Download our educational guide, How to Protect Your Wealth in Challenging Markets.
Who Actually Benefits From a PCRA?
A Personal Choice Retirement Account is a self-directed brokerage window inside the plan, and it is not for everyone. Consider a hypothetical: an owner with a large balance wants the same kind of management applied to their plan dollars that they have on the rest of their wealth. A PCRA can let those dollars be invested and managed directly while staying inside the 401(k). For a participant content with the core menu, the same window adds complexity they may not need. Good design offers it where it fits and does not force it where it does not.
Related Guides
Plan design ties together education, oversight, and a sponsor’s own planning. Start with our 401(k) advisory practice, then go deeper on the areas below.
- Education that supports good use of the plan
- The oversight a clean design supports
- Adding a PCRA to your plan
- Deferred compensation for key people
Getting Started with Holland Capital Management
If you’re evaluating financial decisions in today’s market environment, request a Clarity Call to discuss our planning and investment approach.
Frequently Asked Questions
What Is Open Architecture in a 401(k)?
Open architecture means the plan can hold funds from across the market rather than only the recordkeeper’s own products. It usually widens access to higher-quality funds and lower-cost share classes.
What Is a PCRA?
A PCRA, or Personal Choice Retirement Account, is a self-directed brokerage window inside the plan. It lets a participant invest beyond the core menu while keeping the assets within the 401(k).
Who Should Consider Adding a PCRA?
It tends to suit higher-balance participants, including owners, who want professional management or options beyond the core lineup. Our guide on adding a PCRA walks through the trade-offs.
Does Plan Design Affect Our Fiduciary Risk?
Yes. A clean design with low-cost funds and clear choices is easier to monitor and defend, which supports your oversight duties.
Can a Small Plan Use Open Architecture?
Often yes. Open architecture is a structural choice more than a size threshold, and many smaller plans gain access to better, cheaper funds by adopting it.
How Does Deferred Compensation Fit In?
A nonqualified deferred compensation plan can let key employees defer income beyond 401(k) limits. It is a separate tool that can complement the plan for owners and senior staff.
Will Better Design Improve Returns?
Design does not promise returns. What it can do is lower costs and widen quality choices, which over time may help participant outcomes, though markets, not design, drive results.
