If you’re managing a company 401(k) plan, chances are you want to make sure it’s actually doing its job—helping your employees build a solid retirement and keeping your business on the right side of compliance. But how do you know if your plan is performing well compared to others in your industry?
That’s where 401(k) plan benchmarking comes in.
At Talk Retirement, we believe every plan sponsor deserves clear, actionable insights—not just paperwork and jargon. In this article, we’ll walk you through what benchmarking really means, why it matters, and how to start comparing your plan to others like it.
What Does 401(k) Benchmarking Mean?
In simple terms, 401(k) benchmarking is about checking how your retirement plan stacks up. You’re looking at things like:
How much employees are contributing
What your investment options are doing
Whether your fees are reasonable
How your plan compares to others in your industry
It’s not just a nice-to-have. The Department of Labor actually expects employers to keep tabs on this stuff. Benchmarking helps you spot issues early, make informed decisions, and create a plan that really supports your team.
Why Should You Benchmark Your Plan?
You’ve probably got a lot on your plate. So why add another task? Here’s why Talk Retirement encourages plan sponsors to benchmark regularly:
1. It Helps You Stay Compliant
As a plan sponsor, you’re considered a fiduciary—which means you’re legally responsible for making sure the plan is in your employees’ best interest. Benchmarking shows you’re doing your due diligence.
2. It Helps You Control Costs
401(k) fees can quietly eat into your employees’ savings—and your bottom line. Benchmarking can reveal if you’re overpaying for services or if there are more cost-effective options out there.
3. It Improves the Employee Experience
If people aren’t joining the plan or aren’t saving enough, benchmarking helps you understand why. Maybe the investment menu isn’t great. Maybe employees don’t understand the benefits. Once you know, you can fix it.
4. It Keeps Your Benefits Competitive
Your 401(k) is part of your total compensation package. Benchmarking shows whether your plan is strong enough to attract and retain top talent—especially compared to what other companies in your space are offering.
What Should You Be Looking At?
At Talk Retirement, we help clients focus on a few key metrics when benchmarking their plans:
Participation Rate
How many eligible employees are actually using the plan? If it’s below 80%, it might be time to revisit your communication strategy or consider auto-enrollment.
Deferral Rate
What percentage of their salary are employees contributing on average? The sweet spot is usually between 7% and 9%.
Employer Match
How does your company match contributions? Is it in line with what others are offering? A competitive match can go a long way in boosting participation.
Investment Performance
Are the funds in your plan doing well compared to industry benchmarks? Are you offering enough diversity without overwhelming employees?
Plan Fees
What are you paying for record keeping, advisory services, and fund management? Benchmarking ensures your fees are fair and transparent.
Loans & Withdrawals
Frequent hardship withdrawals or loans can be a red flag. They might signal that employees are struggling or that the plan design isn’t working as intended.
Overall Outcomes
Are employees on track for retirement? What’s the average account balance? Are you helping people build real financial security—or just checking a box?
How to Start Benchmarking Your 401(k)
If this all feels overwhelming, don’t worry. Here’s a simple process to get started:
Step 1: Gather Your Plan Data
Pull your most recent plan documents, fee disclosures, participation reports, and investment summaries. You’ll need this info to compare against industry benchmarks.
Step 2: Find the Right Benchmark Sources
You can use public filings (like Form 5500), national surveys, or work with a partner like Talk Retirement who already has access to industry-specific data.
Step 3: Compare & Analyze
Look at how your plan stacks up—especially in the areas we outlined above. Where are you strong? Where could you improve?
Step 4: Make a Plan for Changes
If you find red flags—like high fees or low engagement—don’t panic. Use the data to make informed decisions. Sometimes small changes, like reworking your investment lineup or enhancing education, can make a big impact.
Step 5: Document Everything
One of the best things you can do as a fiduciary is to keep records. Show that you reviewed your plan, evaluated it thoughtfully, and took steps to improve it. That kind of documentation protects you and your business.
How Talk Retirement Can Help
Benchmarking your 401(k) doesn’t have to be complicated—or time-consuming.
At Talk Retirement, we help employers take a smarter, simpler approach to plan management. From fee analysis and investment reviews to participant education and compliance checks, we’re here to guide you through every step. No sales pitch. No confusing reports. Just honest insights and actionable advice.
And because we work hand-in-hand with a top-tier administration team, you get a complete picture of your plan’s health in one place.
Final Thoughts
If you’ve been wondering whether your 401(k) plan is really working—or if you’re paying too much for too little—benchmarking is the place to start. It gives you clarity, confidence, and control.
Need a hand? Talk Retirement offers complimentary plan reviews and benchmarking reports to help you make informed decisions.
👉 Reach out today and let’s talk about where your 401(k) stands—and how we can make it better.
Phone: 361-271-1211
Email:service@admin316.com
Address: 5875 Daylilly Trail, Springdale, AR 72764
Hours: Monday – Friday, 8:00 AM –5:00 PM CST