401(k) plan benchmarking: Improve your company's retirement plan

Is your company’s plan reaching its full potential and setting employees up for success?

Key takeaways

• Regular 401(k) plan benchmarking helps sponsors evaluate fees, investments and plan features against industry standards.
• An annual benchmarking process can support fiduciary responsibilities and help reduce risk in a changing regulatory environment.
• Reviewing participation, deferral rates and plan design can improve employee retirement readiness and strengthen retention efforts.

Benchmarking your company’s retirement plan is similar to giving it a regular health checkup. This is your chance, as plan sponsor, to review and compare fees, investments and plan features such as a company match against established industry averages as well as evaluate how well it’s serving your participants.

This is meant to be a deep dive into the plan’s operational efficiency and how it compares to the offerings of similar companies. Industry practice often includes conducting a comprehensive benchmarking review at least every three years. However recent ERISA litigation has increased scrutiny of plan fees, service-provider arrangements and fiduciary oversight practices so many advisers and consultants recommend annual benchmarking reviews as part of a prudent governance process.

Prudent risk management

Implementing a formal benchmarking process for a 401(k) or other defined contribution plan isn’t merely about ticking a box. In reality it’s an important tool that may help plan fiduciaries manage and document fiduciary oversight responsibilities. The idea is to identify areas of concern and make adjustments designed to improve participant engagement, retirement readiness and plan effectiveness.

“When we survey our clients their top concerns focus on the end user, their participants,” says Chris Monte, Institutional Trust Business Development Officer. “Specifically they are looking for ways to improve the retirement readiness of employees through plan design as well as a broader approach to financial wellness. Most plan sponsors understand that a retirement plan benefit is a significant tool for recruitment and employee retention.” This underscores the proactive approach businesses are taking recognizing the significant impact on employee satisfaction and financial well-being.

The retirement plan checkup checklist

When you’re evaluating your retirement program and seeking clarity on whether your current strategies are serving your employees’ best interests you’ll want to examine your governance program. This includes a clear checklist of responsibilities and action items that plan fiduciaries should consistently adhere to throughout the year helping ensure diligent oversight. It will encompass things like the investment lineup, provider fees and service reviews, documentation and records management and effective participant communications.

Plan fiduciaries have a responsibility to determine whether their plan fees are reasonable as outlined in Employee Retirement Income Security Act (ERISA). Important fiduciary considerations include: 1) maintaining control and accounting for all investment-related fees and expenses, 2) transparently identifying every party compensated directly or indirectly from portfolio assets and 3) proving that a thorough analysis showed fees were appropriate and reasonable in relation to the level and quality of the services rendered. Fiduciaries must provide plan participants with clear information about all plan-related fees empowering them to make informed decisions about their financial future.

“An important part of fulfilling ERISA fiduciary duties is to setup, follow and document a plan review process to ensure you understand all of the fees associated with your retirement program,” Monte says. This emphasis on plan fees is reflected in Callan’s 2026 DC Trends Survey, showing that 7 in 10 plan sponsors analyzed fees within the past 12 months with 8 in 10 evaluating sources of indirect revenue. This indicates a growing awareness of the impact of fees on retirement savings.

Fee benchmarking pays off

A majority of the survey’s participants said they would review various fee types including often-overlooked management account service fees and indirect revenue streams.

Heightened vigilance around fees may be paying off for plan sponsors and participants alike with nearly half of those surveyed by Callan saying they achieved a direct reduction in plan fees as a result of their benchmarking efforts.

“While providing reasonable fees is part of the benchmark process, plan sponsors can also review participation and deferral rates to evaluate retirement plan health,” Monte says. Determining how effectively your retirement plan is working for your employees is critical.

At Regions we understand the complexities involved in the plan benchmarking process. We provide a comprehensive annual benchmarking study designed to inform and educate both plan sponsors and participants.

Connect with a Regions institutional strategist to:

1. Learn more about getting the insight you need for your retirement plan.
2. Explore our benchmarking process and retirement plan services.

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