For today’s employers, retirement plan benchmarking is no longer just a best practice—it’s a critical component of both talent strategy and fiduciary responsibility. While many plan sponsors understand the importance of benchmarking, fewer have the time, data access, or expertise to do it effectively on their own.
That’s where experienced retirement plan advisors make a meaningful difference.
What Is Retirement Plan Benchmarking?
Retirement plan benchmarking is the process of comparing your plan’s fees, investments, and design features against similar retirement plans in the marketplace. These comparisons typically account for:
- Plan size and assets
- Number of participants
- Industry and geographic factors
- Service scope and complexity
Effective benchmarking goes beyond surface-level comparisons. It requires access to reliable data, an understanding of plan nuances, and the ability to interpret results within a fiduciary framework.
Benchmarking Helps Keep Your Retirement Plan Competitive
A strong retirement plan plays a key role in attracting and retaining employees. Employees increasingly evaluate benefit packages when deciding where to work—and retirement benefits remain one of the most valued offerings.
How Benchmarking Supports Employee Retention & Attraction
When done correctly, benchmarking helps employers:
- Evaluate whether their employer match is competitive
- Identify plan features that improve participation and outcomes
- Ensure plan design aligns with market expectations
- Reinforce their commitment to employee financial wellness
Without proper benchmarking, employers may unknowingly fall behind peers—potentially impacting retention, recruitment, and employee satisfaction.
Benchmarking Is A Core Fiduciary Responsibility
Under ERISA, plan fiduciaries must act prudently and in the best interest of plan participants. Documented retirement plan benchmarking is one of the most effective ways to demonstrate fiduciary due diligence.
Why Fiduciary Oversight Requires More Than Good Intentions
Fiduciaries are expected to:
- Monitor plan fees and expenses for reasonableness
- Evaluate service provider value
- Review investment performance against appropriate benchmarks
- Maintain documentation supporting fiduciary decisions
Regulators and courts consistently emphasize process over results. Having an experienced advisor conduct and document benchmarking helps fiduciaries show that decisions were made using sound data and professional analysis.
The Challenge: Benchmarking Is More Complex Than It Appears
While benchmarking is essential, many plan sponsors face real challenges:
- Limited access to accurate, comparable data
- Difficulty interpreting benchmarking reports
- Uncertainty around what actions—if any—should be taken
- Concern about proper documentation and compliance
Generic benchmarking reports can raise more questions than answers. Without expert guidance, sponsors may overlook key issues or misinterpret results.
Why Many Employers Rely On Retirement Plan Advisors
Working with a knowledgeable retirement plan advisor brings clarity and confidence to the benchmarking process. Advisors provide:
- Independent, data-driven benchmarking analysis
- Insight into industry trends and regulatory expectations
- Practical recommendations tailored to your plan
- Documentation that supports fiduciary compliance
Most importantly, an advisor helps plan sponsors understand what the data means—and how to act on it responsibly.
Benchmarking As Part Of An Ongoing Fiduciary Process
Effective retirement plan benchmarking is not a one-time event. It should be part of an ongoing fiduciary governance strategy that evolves as your organization and workforce change.
Partnering with an experienced advisory team ensures:
- Regular benchmarking aligned with best practices
- Proactive plan monitoring
- Support during audits, reviews, or provider changes
- Confidence that fiduciary responsibilities are being met
Final Thoughts
Retirement plan benchmarking is vital—but doing it well requires expertise, context, and consistency. Employers who partner with experienced advisors are better positioned to offer competitive benefits, protect themselves from fiduciary risk, and deliver stronger outcomes for employees.
If your organization wants benchmarking that goes beyond numbers—and truly supports informed decision-making—working with a trusted advisor can make all the difference. Contact us today.
