Imagine your 401(k) plan as a well-built home. Even the strongest structures need regular maintenance to remain efficient and comfortable. Similarly, a 401(k) plan that looks good on the surface may still need regular check-ups to ensure it stays compliant, cost-effective, and aligned with participant goals.

Understanding 401(k) Benchmarking

401(k) benchmarking involves comparing a plan’s features, fees, investment performance, and participant outcomes against industry standards. This process ensures fees remain reasonable and transparent, crucial for sustaining long-term financial health.

The Value of Regular Reviews

Frequent reviews open the door to better investment alternatives by evaluating current performance. These assessments are essential, not just for performance, but also for preventing fee creep, which can sometimes go unnoticed without vigilant scrutiny.

Documenting Compliance and Engagement

Benchmarking helps document fiduciary compliance, providing peace of mind to plan sponsors. It's also a great opportunity to assess participant engagement and retirement readiness, ensuring that the plan aligns with the needs of its participants.

Adapting to Industry Shifts

Recent industry trends show a shift from reviewing every three years to annual reviews. This change is driven by rising fiduciary lawsuits and market changes, underlining the importance of staying proactive.

Real-World Impacts and Opportunities

Let's consider some scenarios. Imagine unchecked fees growing over time, silently eroding participants' savings. Alternatively, consider the boost in outcomes when better investment options are made available through proactive benchmarking.

Proactive Benchmarking for Future Success

Staying ahead of potential issues through regular benchmarking empowers plan sponsors and enhances plan participant outcomes. Seek expert help to ensure your plan is being reviewed thoroughly and stays on the path to success.

Even if nothing seems "wrong," regular attention to your 401(k) plan can make a significant difference. Schedule a benchmarking review today to keep your financial home in top shape!