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Evaluating Plan Success

Helping prepare your employees for retirement is an awesome responsibility; it takes constancy and prudent oversight. It’s important to remember that evaluating your business’ retirement plan is an ongoing process. As a best practice, investments shoud be reviewed annually, if not quarterly. A survey by PLANSPONSOR® shows that the majority of plan sponsors (91.7%) benchmark their defined contribution plans once per year.[1]


A benchmark report is a great way to gauge plan success; it helps to keep costs under control and goes a long way in meeting your fiduciary responsibility. A thorough report should compare plan costs, engagement, and design features, and include:

  • Total plan cost

  • Investment expense ratios

  • Recordkeeping and administrative costs

  • Advisor consulting and service fees

  • Plan participation rate

  • Deferral rates

  • Employer match

  • Automatic diversification options

  • Catch-up contributions

Benchmarking should provide an objective look at your plan as a whole; it can highlight areas in which your plan excels and point out where your plan can improve. By running this annual report, comparing, evaluating, and making prudent adjustments, you can position your plan and its participants toward success.

Plan Participation

A key metric on your benchmarking report to monitor plan success is participation rate. Over the past couple of years, more and more plan sponsors are including automatic enrollment as an advanced plan design feature and it seems to have a positive effect on participation.

Average Participation Rate[2]

  • Auto-enrollment 92%

  • Voluntary Enrollment 42%

Other plan features and automatic options that plan sponsors and participants are embracing include: automatic escalation, qualified default investment alternative (QDIA), and enhanced employer stretch options.

PLANSPONSOR® magazine conducts an annual survey of defined contribution retirement plans; this survey can be used to see how your plan stacks up to others of similar size. View 2015 DC Survey: Plan Benchmarking.

However, if you have not run a complete evaluation lately, it might be time to run a benchmark report to compare your plan to others in your peer group. Regular monitoring can help to catch and adjust minor issues before they become bigger ones that may result in corrective distributions or litigation.

Evaluating your plan is an ongoing process; and if you are still looking for a New Year’s Resolution, here is one for you: aim for retirement plan success in 2017!

PWMG 401(K) ADVISORS 11 Foster Street, Suite 200 Worcester, MA 01608

OFFICE: (877) 712-2263 FAX: (508) 519-0285 WEB: EMAIL:

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements and you should consult your attorney or tax advisor for guidance on your specific situation. Disclosure: Securities and Retirement Plan Consulting Program advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC.

[1] Moore, Rebecca. “Plan Benchmarking Measures.” PLANSPONSOR. Feb 2015

[2] Thornton, Nick. “Auto enroll doubles participation rates.” BenefitsPRO. January 2015.

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