Think of your 401(k) like a well-built home; even the sturdiest of structures require regular maintenance to stay in top shape. Maintaining your 401(k) isn't just about checking the boxes—it's about ensuring your retirement plan is as efficient and robust as possible.

Understanding 401(k) Benchmarking

Benchmarking involves comparing your plan's features, fees, investment performance, and participant outcomes against industry standards. It's a vital process to ensure everything aligns with the best practices and that participant fees remain reasonable and transparent.

Evaluating Investment Options

Regular reviews of investment performance not only maintain the plan's effectiveness but also open doors to better alternatives. This proactive approach can significantly improve participant engagement and retirement readiness.

Documenting Fiduciary Compliance

The Employee Retirement Income Security Act mandates fiduciary responsibility in managing 401(k) plans. Benchmarking provides essential documentation of due diligence, thereby reducing liability and supporting peace of mind for sponsors.

Adapting to Industry Trends

There's a noticeable shift in the industry from a three-year review cycle to annual reviews. This change is driven by increased fiduciary lawsuits and evolving market dynamics, underscoring the importance of staying ahead of potential issues.

Proactive Problem Solving

Consider the consequences of unchecked fees or outdated investment options. Small inefficiencies can compound over time, potentially draining retirement savings. By regularly benchmarking, you can address these areas proactively.

Conclusion

Proactive benchmarking helps prevent problems before they arise, ensuring your retirement plan remains compliant, cost-effective, and aligned with participant goals. Don't hesitate to seek expert help for a comprehensive review of your plans.