How to Know if Your 401(k) Plan is Competitive

In a competitive hiring market, it is critical to review your retirement plan offering to be sure it isn’t holding you back from acquiring and retaining top talent. Listed below are steps you can take with the resources available to you. Remember, your most valuable resource is your existing employee base (both participants and non-participants) - ask them what is important and how you can deliver the retirement services they want.

What you should know

Us vs. Them

Your provider can and should tell you what they are seeing with companies of your size, industry, and geographic area.
To compare with specific competitors that offer retirement plans, you can download their most recent publicly available Form 5500 from the DOL’s website (efast.dol.gov/5500search).¹ Here you can review the audit report (if applicable) and see the level of employer contributions and other plan features.
Connect with local employee benefits associations to see if they have additional comparative data.

Information does not equal communication

In order for it to have impact, participants must receive and understand the information on the 401(k) plan details. Give the information you offer context. Providers should customize your employee education and communications to the needs of your participants.
Simpler is often better. Your employees are likely not investment experts, and do not need to be. Automatic features can assist them on their path and benefit them long-term.

Know the long-term costs to you and to your plan participants

After saving adequately and earning a competitive employer contribution, long term retirement success lies in access to an investment menu with reasonable fees and adequate opportunities for diversification within and among asset classes.

Consider reviewing and updating the following plan features

Eligibility for salary deferrals
Loans and hardship distributions
In-service withdrawals after age 59-1/2
Employer/Safe harbor contributions
Auto-enrollment and escalation

1. Common 401(k) Plan Mistakes – Your Plan isn’t Competitive, Conrad Siegel

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