401(k) Plan Benchmarking
A strategic approach that enables employers to evaluate and optimize their retirement offerings, comparing plan design, investment options, and fees against industry standards to ensure your plan remains competitive, efficient, and valuable to participants.
Get Your Free Benchmarking Review in 10 Minutes
Give us your company name and EIN. We pull your plan's public Form 5500 filing, benchmark it against same-size plans, and send you a written review — no cost, no obligation, no data to gather on your end.
- Your admin cost per participant vs. the peer median
- Participation, assets per participant, and fee levels in basis points
- Items worth confirming before your next fiduciary review
How it works
Request Your Free Benchmarking Review
Two quick steps — your review is emailed to you.
Why Benchmarking Is a Fiduciary Obligation, Not a Shopping Exercise
ERISA 404(a)(1) requires fiduciaries to act prudently and to defray reasonable plan expenses. "Reasonable" is a comparative word — it cannot be evaluated without comparison. And ERISA 408(b)(2) only exempts a service arrangement from the prohibited-transaction rules if the services are necessary and the compensation is reasonable, which the responsible fiduciary must affirmatively determine using the provider's disclosures.
That is the whole legal basis of benchmarking: you cannot conclude fees are reasonable if you never measured them. In the wave of excessive-fee litigation, the recurring fact pattern is not that a plan paid too much — it is that no fiduciary could produce evidence of ever having checked.
What a Real Benchmarking Review Measures
| Layer | What we measure | What it exposes |
|---|---|---|
| Investment expense | Fund-by-fund expense ratios, share class actually held vs. available, revenue sharing | Retail share classes in a plan that qualifies for institutional pricing |
| Recordkeeping & administration | Per-participant and asset-based fees, base fees, transaction and event charges | Asset-based pricing that grew with the plan while the work did not |
| Advisory / investment fiduciary | Advisor compensation, service scope, fiduciary status (3(21) vs. 3(38)) | Fees paid for a fiduciary service the plan never actually received |
| Fee allocation | Who pays: plan assets, forfeitures, employer, per-head vs. pro-rata | Small balances subsidizing large ones, or the reverse |
| Plan design & outcomes | Eligibility, match formula, auto-enrollment, participation and deferral rates | Cost being paid without the participation the design should produce |
| Service delivery | Testing timeliness, notice delivery, 5500 accuracy, issue resolution | What the fee is actually buying in practice |
The Data We Use
Your 408(b)(2) disclosures
The provider's own required fee disclosure — the document a fiduciary is supposed to be evaluating.
Form 5500, Schedules C and H
Reported service-provider compensation and trust activity, which is public and comparable across plans of your size.
Peer sets by plan size
Comparisons built on participant count and asset level, because per-participant economics change dramatically with scale.
Fund-level expense data
Actual holdings, share classes and available alternatives within the same fund family.
Your participant data
Participation, deferral rates, balances and outcomes — the return side of the cost question.
Written conclusions
Findings, rationale, and recommended actions, dated and retained in the fiduciary file.
Where Plan Sponsors Get Hurt
Filing the 408(b)(2) disclosure unread. The exemption depends on the fiduciary's determination that compensation is reasonable, and that determination has to happen.
Accepting a provider's own "benchmark." A comparison produced by the party being compared is not independent evidence.
Benchmarking once, years ago. Prudence is ongoing. Asset-based fees rise automatically as balances grow.
Ignoring revenue sharing. Indirect compensation is still plan compensation and must be identified and reasonable.
No documentation of the decision. Deciding to keep a provider is a fiduciary decision. Undocumented, it is indistinguishable from inattention.
What You Get
- A written benchmarking report showing each fee layer against a size-appropriate peer set.
- Specific, prioritized actions — share-class changes, fee renegotiation, allocation fixes, design changes.
- Documentation formatted to sit in the fiduciary file as evidence of a prudent process.
- An independent view: Admin316 does not sell investments or recordkeeping, so there is no product on the other side of the recommendation.
How Plan Fees Are Actually Charged
| Structure | How it is billed | What to watch |
|---|---|---|
| Asset-based (bps) | A percentage of plan assets | Cost rises automatically with market gains and contributions even when the work does not change |
| Per-participant | A flat amount per participant or per account | Whether terminated participants with balances are still being billed |
| Base plus transactional | Flat base fee plus charges per event | Loan, distribution, QDRO and amendment fees that never appear in a quoted rate |
| Revenue sharing | Embedded in fund expenses and paid to the recordkeeper | Whether it is disclosed, reasonable, and credited back to participants |
| Wrap or platform fee | Added inside insurance separate accounts or bundled products | Total participant cost that a fund expense ratio alone will not reveal |
| Paid by the employer | Invoiced to the company instead of the plan | Generally the cleanest structure; confirm which expenses are settlor expenses |
Reading Your Form 5500 Like an Examiner
Schedule C
Direct and indirect compensation reported for each service provider. This is where undisclosed revenue sharing tends to become visible.
Schedule H
Trust-level income, expenses and asset detail. Administrative expenses paid from plan assets show up here.
Schedule A
Insurance contract fees and commissions, which sponsors on bundled platforms routinely do not know they pay.
Line 4a and 4l
The Form 5500 questions that flag late deferral deposits and delinquent participant contributions — a common DOL selection trigger.
Participant counts
Drives the large-plan audit requirement and the per-participant economics of any fee comparison.
Filing history
Late or amended filings tell their own story about administrative control.
Benchmarking More Than Price
Service level. Testing delivered on time, notices delivered with proof, accurate filings, questions resolved without escalation. A cheap provider that generates corrections is not cheap.
Fiduciary status received. If you are paying for fiduciary services, the agreement should acknowledge the specific ERISA section. Paying fiduciary-level fees for non-fiduciary service is a finding waiting to be made.
Participant outcomes. Participation, average deferral rate, auto-enrollment and escalation adoption, and how many eligible employees remain outside the plan.
Design efficiency. A safe harbor or auto-enrollment design can eliminate recurring testing failures and their correction costs entirely.
Who This Fits
- Plans that have never been benchmarked, or not in the last three years.
- Plans that grew substantially while an asset-based fee schedule stayed unchanged.
- Sponsors who want documented evidence of fee reasonableness in the fiduciary file before anyone asks for it.
- Committees preparing to renegotiate with an incumbent provider and needing real comparative data to do it.
Where It Falls Short
- Benchmarking documents and informs a decision; it does not make the decision or implement it.
- If administration is the actual problem, cheaper pricing will not fix operational failures — that is a 3(16) issue.
Frequently Asked Questions
How often should a plan be benchmarked?
There is no statutory interval, but ERISA's duty of prudence is ongoing and asset-based fees change as the plan grows. A documented review at least every one to three years, and any time providers, pricing or plan size change materially, is a defensible cadence.
Isn't benchmarking just a way to sell us a new provider?
It should not be. Admin316 does not sell recordkeeping or investment products. Many reviews conclude that the current provider is reasonably priced, and that conclusion documented in writing is exactly what a fiduciary needs.
What documents do you need from us?
The plan document and adoption agreement, the most recent 408(b)(2) fee disclosure, the last two Form 5500 filings with schedules, a current fund lineup with share classes, the recordkeeper fee schedule, and a participant census.
Does benchmarking prove our fees are reasonable?
Benchmarking produces the evidence a fiduciary uses to reach and document that conclusion. Reasonableness is the fiduciary's determination, based on the services received and comparable market pricing.
What if the review finds we have been overpaying?
You address it prospectively: share-class corrections, renegotiated pricing, a changed fee allocation, or a provider change, with the analysis and decision documented. Acting on findings is what converts a review into fiduciary protection.
Can plan expenses be paid from plan assets?
Reasonable expenses of administering the plan generally can be paid from plan assets. Settlor expenses that benefit the employer, such as designing or deciding to establish or terminate a plan, generally cannot. The distinction should be documented.
Are the lowest fees always the prudent choice?
No. ERISA requires reasonable fees for the services received, not the cheapest available. The documented comparison of cost against services is what satisfies the duty.
How long does a benchmarking review take?
Typically a few weeks once documents are provided, most of which is waiting on provider disclosures and fund data rather than analysis.
Will you tell us to change providers?
Only if the data supports it. We do not sell recordkeeping or investments, so a written conclusion that your current arrangement is reasonable is an equally useful outcome.
Educational information only. Fiduciary status, plan operations and correction options depend on your plan document, service agreements and specific facts. Nothing here is legal, tax, investment or actuarial advice, and reading it does not create a fiduciary or client relationship.
Plan Design Benchmarking
We evaluate your plan type, employer match structure, vesting schedule, and investment options, comparing them against industry standards to highlight opportunities for enhancing participation rates, improving employee satisfaction, and keeping your plan competitive.
Employer Match Comparison
- Design
- Competitiveness
Vesting Schedule Review
- Retention
- Structure
Auto-Enrollment Assessment
- Participation
- Engagement
Fee Benchmarking
We gather your current fee structure including investment, administrative, recordkeeping, and advisor fees, then evaluate them as both a dollar amount and a percentage of plan assets to ensure they are competitive, reasonable, and reflective of the services provided.
408(b)(2) Fee Disclosure Review
- Compliance
- Transparency
Direct & Indirect Fee Analysis
- Cost
- Value
Industry Fee Comparison
- Standards
- Savings
Communication & Education Review
We assess whether your communication strategies effectively inform and engage employees about plan benefits, features, and options, then provide clear recommendations to strengthen employee education, boost plan engagement, and ensure participants are making informed retirement decisions.
Employee Education Assessment
- Communication
- Clarity
Summary Plan Description Review
- Documentation
- Accuracy
Engagement Strategy Review
- Participation
- Awareness
Better Benchmarking. Better Plans. Better Outcomes.
Benchmarking is not just best practice, it is a fiduciary obligation. Admin316 makes the process simple, insightful, and immediately actionable so your plan works harder for your employees and your organization.
Stay Competitive
A robust 401(k) plan is one of the most powerful tools for attracting and retaining top talent, we ensure your plan keeps pace with what employees expect and what the market demands.
Reduce Fiduciary Risk
Benchmarking enables you to assess plan features and fees against industry standards, identifying and mitigating potential compliance and fiduciary liabilities before they become costly problems.
Optimize Participant Outcomes
By aligning your plan with industry benchmarks, you give employees a stronger platform for building retirement savings, long-term retirement readiness across your workforce.
Simple, Proven Process
Our benchmarking process is straightforward and hassle-free, all we need to get started is your 408(b)(2) fee disclosure and Summary Plan Description, and we handle everything else from there.
- Worked With 500+ Plan Sponsors
- ERISA Industry Expert
- Trusted Independent Advisors
Get Your Free Fiduciary GuideA plain-English guide to what ERISA actually puts on the plan sponsor — including 401(k) benchmarking — and which of those duties can be transferred to an independent fiduciary. No cost, no call required.
Get the guide →We Work Alongside Leading Recordkeepers & Plan Providers
Admin316 Client Result
Plan Sponsor · Admin316 Client
Over $142,000 in Client Penalties Avoided
"Admin316's analysis of our DOL filings uncovered excessive fees and saved our company more than $142,000 annually."
Benchmarking is a duty, not a shopping trip
ERISA requires plan fiduciaries to ensure that only reasonable fees are paid from plan assets. Reasonable is a relative word, and the only way to establish it is by comparison against plans of similar size and service scope — documented, dated, and kept. That is benchmarking. Its output is not a cheaper invoice; it is evidence that you tested the price and reached a defensible conclusion.
Every dollar the plan pays, in one place
Fees hide in four layers, and sponsors usually see only the first.
| Layer | Typical form | Where to find it |
|---|---|---|
| Administration / recordkeeping | Base fee plus per-participant charge | 408(b)(2) disclosure; service agreement |
| Investment expense | Expense ratio inside each fund | Fund fact sheets; participant 404a-5 notice |
| Advisory | Percentage of assets or flat retainer | Advisor's disclosure |
| Event and transaction fees | Loans, distributions, QDROs, force-outs | Fee schedule appendix — the page people skip |
What "similar" has to mean
A comparison is only useful against plans that match on the dimensions that actually drive cost:
- Participant count — the primary cost driver, far more than asset size
- Total assets — because so much pricing is still asset-based
- Average balance — many small balances cost more to service than few large ones
- Service scope — a plan buying 3(16) administration and signature authority is not comparable to one buying recordkeeping alone
- Plan features — loans, safe harbor, profit sharing and payroll integrations all add real work
Benchmarks pulled from Form 5500 filings are the most defensible source available, because they are the plans' own reported numbers rather than a vendor's marketing average. Schedule C and Schedule H show what comparable plans actually paid.
Cadence: how often, and what triggers an off-cycle review
Review annually and run a full benchmarking study every three years at minimum. Run one immediately if any of these happen:
- Participant count moves more than about 20%
- Assets grow substantially under an asset-based fee
- Your provider is acquired, or changes its fee schedule
- Service quality drops — slow distributions, missed testing deadlines, unanswered tickets
- You add or drop a major feature such as a safe harbor match or auto-enrollment
The documentation that makes it count
An undocumented benchmarking exercise legally never happened. The file should contain the date, the data source, the comparison group and why it was chosen, the fee summary in dollars, the committee's conclusion in plain language, and any action taken — including a decision to make no change, which is perfectly valid when the reasoning is recorded. Minutes signed and stored. Ten minutes of writing protects the entire review.
Cheapest is not the standard
ERISA asks whether fees are reasonable for the services received, not whether they are the lowest available. A plan paying more for a provider that accepts the 3(16) plan administrator role, approves distributions and signs the Form 5500 is buying a genuinely different product than one paying less for software and a call center. Price the service scope, not just the invoice — and see what the 402(a) named fiduciary role moves off your desk.
Frequently asked
Can the plan pay for the benchmarking study? Generally yes, when it is a settlor-neutral administrative expense tied to fiduciary duties. Document the determination.
Do we have to change providers if we are above average? No. You have to be able to explain why the fee is reasonable for what you receive.
Is a provider's own benchmarking report enough? It is a data point, not an independent review. Fiduciaries should not rely solely on a study produced by the party being evaluated.
Retirement plan benchmarking is broader than 401(k) fees
Retirement plan benchmarking covers every plan type a sponsor runs — 401(k), 403(b), defined benefit, cash balance and non-qualified arrangements. The duty is the same in each: prove the fees and services are reasonable for a plan of your size. What changes is the comparison set. A 120-life 401(k) is measured against 401(k) plans in its asset band; a cash balance plan is measured against actuarial and administration pricing for similar funded designs. Benchmarking a plan against the wrong peer group is worse than not benchmarking, because the file now documents a conclusion you cannot defend.
How often are you required to benchmark?
ERISA sets no calendar. Courts and DOL investigators look for a regular, documented process, and the practice that holds up is a full study every three years with an annual interim review at the committee meeting. Four events should trigger a study regardless of where you are in that cycle:
- A material change in plan assets or headcount — roughly 25% or more in either direction.
- Any change in service scope, recordkeeper, advisor or fee structure.
- A new 408(b)(2) disclosure showing fees you were not expecting.
- A participant complaint, DOL inquiry or audit finding touching fees.
The fee benchmarking requirement people ask about is really the 408(b)(2) and 404a-5 disclosure regime plus the general duty of prudence. Disclosure is the provider's job. Reading it, testing it and keeping the evidence is yours — or ours, if we hold the ERISA plan administrator appointment.
Not sure who is actually on the hook at your company?
Admin316 serves as the ERISA 3(16) plan administrator and 402(a) named fiduciary, which means we sign the Form 5500 and carry the administrative fiduciary duty instead of your owner or HR lead.
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