Let's Talk About the People in the Plan
In Strategy One, we covered strong fiduciary governance. In Strategy Two, we talked about delegating the right responsibilities to trusted, qualified partners. In Strategy Three, we made the case for designing the plan on purpose. Now it's time to turn from the plan itself to the people it serves — because even the best-designed plan only succeeds if participants understand it, use it, and stick with it.
A retirement plan should address the education and income needs of participants — emphasizing savings and sound investing habits.
Here's the thing — plan design can do a lot of the heavy lifting, but it can't do everything. At some point, real people have to make real decisions: how much to save, when to claim Social Security, what retirement income actually needs to look like. Education is what turns a well-built plan into a well-used one.
Start With a Simple Question: What Do Your Participants Actually Need?
Before rolling out newsletters, webinars, or lunch-and-learns, it helps to step back and ask what participants genuinely need from their plan and its education program. In our experience, the answer usually comes down to a plan — and a message — built around a few essentials:
|
What Participants Need |
Why It Matters |
|
A low-cost plan |
Every dollar not spent on fees stays invested and compounding for the participant |
|
Easily accessible, well-communicated benefits |
People can't take advantage of features they don't know about or can't find |
|
Holistic investment offerings (target-date / lifestyle portfolios) |
One sensible decision can put an entire retirement strategy on autopilot |
|
Options built in their best interests |
Trust grows when participants see the plan was designed for them, not sold to them |
|
Easy-to-own investments |
Simplicity encourages participation — and discourages tinkering at the wrong moments |
And education shouldn't stop at the plan's front door. The topics participants tend to need most reach across their whole financial picture:
|
Education Topic |
What It Helps Participants Do |
|
Investing fundamentals |
Understand risk, return, diversification, and why time in the market matters |
|
Social Security considerations |
Make informed claiming decisions that can meaningfully change lifetime income |
|
Retirement income needs & planning |
Translate a savings balance into a realistic monthly income picture |
Education works best when it meets people where they are — clear, practical, and focused on the decisions they actually face.
Targeting Income Replacement in Retirement
So what should all this education point toward? A concrete, understandable goal. As we discussed in Strategy Three, a commonly cited rule of thumb is helping participants replace roughly 80% of their pre-retirement income. Research from Fidelity and others consistently frames retirement readiness this way — not as a lump sum to admire, but as a stream of income to live on.
That income typically comes from the familiar three-legged stool:
|
Income Source |
Role in Retirement |
|
Retirement plan savings |
The core, employer-sponsored engine — contributions, match, and decades of growth |
|
Personal savings |
A flexible cushion for goals, surprises, and gaps |
|
Social Security |
A guaranteed baseline of income to build everything else around |
Effective participant education keeps bringing the conversation back to this framing. When people can see the gap between the income they'll want and the income they're on track for, saving stops feeling abstract — and contribution increases start feeling like progress, not sacrifice.
The Importance of Staying the Course
If there's one lesson worth teaching participants above all others, it's this: the biggest threat to long-term returns usually isn't the market — it's our reaction to the market.
Consider a hypothetical $10,000 investment tracking IFC Index Portfolios beginning January 1, 1928. History has offered no shortage of terrifying moments to sell: the Great Crash of 1929, WWII uncertainty in 1939, the Suez Crisis, the Cuban Missile Crisis, the Oil Crisis, Black Monday, 9/11, the 2008 Financial Crisis, COVID-19 in March 2020. At every one of those points, moving to cash felt like the safe, sensible thing to do.
But when we chart what happens to the investor who redeemed for cash (represented by the IFC One-Year Fixed Income Index) at each of those moments versus the investor who simply stayed put, the story is striking: in this historical illustration, each cash redemption scenario ended with a lower value than the original, untouched investment.
Growth of a hypothetical $10,000 investment tracking IFC Index Portfolios, January 1, 1928 to present. Illustrative recreation using hypothetical back-tested data. See disclosures below.
"Illustrative example only; does not reflect actual investor experience or the impact of fees, expenses, or taxes. Results shown are based on index data and assumptions that may not reflect real-world outcomes."
How to read this chart: the red line shows the value of a single $10,000 investment made in January 1928 and left completely untouched, through every crash, war, and crisis that followed. Each orange line branches off at a moment of maximum fear — the point where a frightened investor might have said "enough" and redeemed the entire balance for cash (represented by the IFC One-Year Fixed Income Index). From that moment on, the orange line grows only at fixed-income rates, while the red line keeps riding the long-term growth of the market.
Notice two things. First, in this illustration, each orange line ends up below the red one — in some cases by significant margins. Selling during the Great Crash, Black Monday, or the 2008 Financial Crisis may have felt prudent in the moment, but each such decision would have forfeited periods of compounding in this illustration. Second, notice how the red line itself behaves: in this historical illustration, many of those declines become less prominent over longer time periods. Time in the market has a way of shrinking crises.
|
Moment of Panic |
When It Happened |
|
Great Crash |
October 1929 |
|
WWII Uncertainty |
August 1939 |
|
Suez Crisis |
October 1956 |
|
Cuban Missile Crisis |
October 1962 |
|
Oil Crisis |
October 1973 |
|
Black Monday |
October 1987 |
|
9/11 |
September 2001 |
|
Financial Crisis |
September 2008 |
|
COVID-19 |
March 2020 |
In this illustration, hypothetical investors who moved to cash ended with lower values than those who remained invested.
This is exactly the kind of lesson participant education should drive home — ideally before the next downturn, not during it. Participants who understand this history are far more likely to keep contributing through volatility, leave their allocations alone, and let time and discipline do the work.
Hypothetical back-tested performance is provided for illustrative purposes only; it does not represent the actual performance of any client portfolio or account, and past performance does not guarantee future results. For full sources, methodology, and important disclosures regarding IFC Indexes and IFC Index Portfolios, see investingforcatholics.com/disclosures.
How Target Date Portfolios Enable Good Investor Behavior
Knowing that staying the course matters is one thing; actually doing it — while headlines scream and account balances dip — is another. This is where plan design and participant behavior meet, and it can be an argument for considering target date (or lifestyle) portfolios the centerpiece of a plan's investment menu.
When participants are not managing their portfolios day to day, they are far less likely to make the panic-driven moves described above. A target date portfolio hands the ongoing decisions — asset allocation, diversification, rebalancing — to professional management, leaving the participant with just one job: keep contributing. With no daily decisions to second-guess, there is far less temptation to tinker, time the market, or flee to cash at exactly the wrong moment. The structure is intended to help make staying the course the default behavior.
The evidence backs this up. Morningstar's annual "Mind the Gap" study measures the difference between the returns funds report and the returns investors actually earn — a gap driven almost entirely by poorly timed buying and selling. In its 2025 edition, covering the ten years ended December 31, 2024, Morningstar found that the average fund investor gave up about 1.2 percentage points per year — roughly 15% of their total returns — to timing decisions, according to Morningstar. Morningstar reported that investors in allocation funds experienced the narrowest behavior gap among the fund categories studied. Morningstar attributes this to how these all-in-one funds are typically held: in long-term retirement accounts, on autopilot, with trading kept to a minimum.
There is a second behavioral benefit worth naming. Managed portfolios of this kind are generally designed to lower risk as a participant moves toward retirement — gradually shifting from growth-oriented investments in the early years to a more conservative mix as the target date approaches. This "glide path" happens automatically, without the participant needing to remember, decide, or act. So not only does the participant stay invested through volatility; the portfolio itself is quietly becoming more appropriate for their stage of life the entire time.
Target date portfolios are designed to turn good investor behavior from an act of willpower into the path of least resistance.
Source: Jeffrey Ptak, "The More Investors Traded, the Less Their Average Dollar Made" (Mind the Gap 2025), Morningstar, August 2025, morningstar.com. Target date portfolio allocations become more conservative over time but are not guaranteed, and investments remain subject to market risk, including near and after the target date.
The Annuity Question: What a Guarantee Really Costs
No conversation about retirement income is complete without addressing annuities. Guaranteed lifetime income sounds wonderful — and for some participants, in some situations, an annuity can play a legitimate role. But plan sponsors and participants alike need to understand something the glossy brochures rarely spell out:
An annuities guarantee is not free and involves trade-offs. The insurance company participates in returns the investor might otherwise retain.
Here's how that partnership works. When a participant hands their savings to an annuity provider, the insurer may invest that money in markets similar to those the participant could have accessed directly. The insurer then keeps the difference between what those markets earn and what it has promised to pay out — along with layers of fees, commissions, rider charges, and surrender penalties. The guarantee is real, and may involve trade-offs such as foregone growth.
That's the opportunity cost, and it's exactly why the chart above matters so much. A participant who understands how markets work — who has internalized that every crisis in a century of investing became a ripple on a rising line — can see what they're actually trading away. The power of compounding is the single greatest asset a long-term investor owns. An annuity, in effect, sells a large share of that asset to an insurance company in exchange for certainty.
|
The Cost of the Guarantee |
Who Bears It |
|
Foregone market growth and compounding |
The participant, whose money now grows at the insurer's promised rate, not the market's long-term rate |
|
Fees, commissions, rider charges, surrender penalties |
The retiree, through returns quietly reduced year after year |
|
Loss of liquidity and flexibility |
The retiree, who can no longer adapt as health, needs, or circumstances change |
|
Assets that typically end with the annuitant |
Depending on the annuity structure selected, some benefits may be reduced or may not continue to heirs without additional features.
|
That last row deserves a moment of reflection, especially for a faith-based plan. Wealth that stays invested and compounds doesn't just fund a retirement — it can outlive the retiree, blessing children, grandchildren, and the ministries and causes close to their heart. Annuitized dollars, in many structures, may not pass to heirs without additional features (or require yet more costly riders to do otherwise). Guarantees typically involve trade-offs, which may include reduced growth potential, additional costs, or reduced flexibility depending on the product selected.
None of this means annuities are never appropriate — a modest allocation can make sense for someone with no other guaranteed income, deep anxiety about markets, or unusual longevity in the family. But the decision should be made with clear eyes, and that clarity only comes from education. This is precisely why teaching participants how markets work and the value of compound growth isn't a nice-to-have — it's an essential lesson, and one of the most valuable things a plan sponsor can impart.
Participants may benefit from understanding how markets have historically rewarded patient, long-term investors.
Bringing It All Together
A strong participant education effort isn't a single seminar — it's an ongoing system that reinforces the plan's design:
|
Element |
What It Does |
|
Clear, accessible communication |
Ensures participants actually know what their plan offers |
|
Low costs and easy-to-own investments |
Keep more money working and reduce decision fatigue |
|
Income-replacement framing |
Turns abstract balances into a concrete retirement goal |
|
Social Security and income planning guidance |
Helps participants complete the full retirement picture |
|
Stay-the-course discipline |
Protects decades of savings from moments of panic |
|
Compounding & annuity trade-off education |
Ensures guarantees are chosen with clear eyes, not sold on fear |
Good plan design builds the path — good education keeps participants walking it.
A Fiduciary Reminder
As always, even in non-ERISA church plans, fiduciary responsibility still applies. Providing sound, participant-focused education — free of conflicts and built around participants' best interests — is part of acting prudently and caring well for those the plan serves.
You may delegate functions — but not responsibility. That includes the responsibility to make sure participants are equipped to succeed.
Bottom Line
A healthy church retirement plan doesn't stop at good governance, trusted partners, and intentional design. It speaks plainly to its participants — about saving enough, investing sensibly, planning for real retirement income, and staying calm when markets aren't. Do that consistently, and education becomes more than information. It becomes confidence.
And ultimately, it serves the same mission we keep coming back to:
To care for those who have faithfully served.
Looking Ahead
In Strategy Five, we'll bring the series home — pulling all five strategies together into a practical roadmap your plan committee can put to work right away.
About the Author
Mary Brunson – Co-Founder, Senior Vice President, Wealth Advisor, Investing for Catholics.
Mary Brunson is the Co-founder of Investing for Catholics (IFC), a division of Index Fund Advisors, Inc. (IFA). Since 2009, she has focused her advisory efforts on Catholic faith-consistent investing, applying financial science to support fiduciary advice and institutional wealth services aligned with Catholic values. She works closely with religious orders and Catholic organizations—including diocesan plans, endowments, and foundations—as well as public trusts, pension plans, and individuals.
Disclosures
Advisory services are offered through Index Fund Advisors, Inc., a registered investment adviser. Readers should consult their own legal, tax, or financial professionals regarding their specific situation before taking any action.
This article is provided for informational and educational purposes only and is not intended to constitute legal, tax, or investment advice. The discussion of laws, regulations, court decisions, fiduciary standards, and governance practices is general in nature and may not apply to all plans or circumstances. Outcomes and interpretations may vary based on specific facts, plan design, governance practices, and applicable law. No assurance can be given that any approach, strategy, or practice will achieve a specific result or reduce risk.
Investing involves risk, including the possible loss of principal. Past performance is not indicative of future results.
Certain statements herein reflect the author's opinions and are subject to change without notice. Forward-looking statements are not guarantees of future outcomes.
