Benchmarking employee benefits plans is a valuable way for a company to assess its plan in comparison to others. This process helps to reveal recruiting and retention trends, highlight areas for improvement in plan design, and provide a framework for making plan adjustments.
Fiduciary Responsibility
The Department of Labor (DOL) explains in its publication Understanding Retirement Plan Fees and Expenses that “plan fees and expenses are important considerations for all types of retirement plans.” According to the Employee Retirement Income Security Act (ERISA) standards, fiduciaries who are decision makers for plans have “responsibility to ensure that the services provided to their plan are necessary and that the cost of those services is reasonable.”
A common approach for plan sponsors is to use a request for information (RFI) or request for proposal (RFP) as part of selecting and monitoring service providers specific to a plan’s design. Benchmarking and evaluation of plan administration, investment and other types of fees are beyond the scope of this blog.
The Internal Revenue Service (IRS) describes retirement plan fiduciary responsibilities as:
- Acting solely in the interest of the participants and their beneficiaries;
- Acting for the exclusive purpose of providing benefits to workers participating in the plan and their beneficiaries, and defraying reasonable expenses of the plan;
- Carrying out duties with the care, skill, prudence and diligence of a prudent person familiar with the matters;
- Following the plan documents; and
- Diversifying plan investments.
With fiduciary responsibility comes potential liability. The DOL’s publication, “Fiduciary Responsibilities,” explains that “fiduciaries who do not follow these principles of conduct may be personally liable to restore any losses to the plan, or to restore any profits made through improper use of plan assets.” The JP Morgan 2025 Defined Contribution Plan Sponsor Survey found that 53% of plan sponsors do not even realize they are a plan fiduciary.
What 401(k) Topics Should Be Benchmarked?
Evaluating a 401(k) plan is more than simply understanding fiduciary issues; it also includes areas like plan deferrals, participation rates and the overall plan design for competitive purposes. Many statistics can be benchmarked, including:
- Plan eligibility
- Vesting schedule
- Matching contributions
- Employer contributions
- Employee contribution rate
- Use of automatic enrollments
- Roth availability
- Average account balances by demographic
- Access to professionally managed allocations
- Offering to part-time employees
- Statistics by generation.
Selection of Benchmarking Statistics From 2025 Surveys
Vanguard’s How America Saves 2025 survey examines a wide variety of employer matching formulas. The survey found that among plans offering an employer match in 2024, 68% (covering 60% of participants) provided a single-tier match formula, such as $0.50 per dollar on the first 6% of pay.
Employees increasingly want workplace support for financial challenges. According to Morgan Stanley’s State of the Workplace, 2025 Financial Benefits Study, 84% of employees stated that employers should more actively assist them with their financial issues. The JP Morgan survey found that 80% of plan sponsors feel responsible for employees’ financial wellness.
From the PLANSPONSOR 2025 DC Survey: Plan Benchmarking, 47.1% of DC plan sponsors use automatic enrollment.
Data from Empower details the average and median 401(k) balances by age.
Statistics from the 25th Annual Transamerica Retirement Survey reflect the reasons for hardship withdrawals, including medical expenses (18%), payment of tuition and educational fees (18%), expenses and losses due to a disaster (15%), and the purchase of a principal residence (10%).
According to Charles Schwab’s 2025 Workplace Survey 401(k) Plan Participants, 62% of plan participants check their 401(k) performance monthly or more.
Takeaways for Employers
Having a documented fiduciary process is an essential part of meeting an employer’s fiduciary obligations as well as helping ensure the plan operates successfully. Regular benchmarking of a 401(k) plan will help ensure that the plan continues to meet the company’s retirement benefits goals with its total rewards framework.
Visit the Benefits Knowledge Center to view our InfoQuicks on 401(k) plans, including survey data, investment menus, plan loans and hardship withdrawals, selecting and monitoring professional service providers, and fiduciary responsibility under ERISA.
Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.
