Without a benchmark analysis of their company sponsored retirment plan, plan sponsors will not be competitve for top talented employees. The trend is for employees to take a serious look at the quality of employee benefits offered by their prospective employer as well as its competitors. The retirement plan offered must provide the employee with the most efficient tools of reaching their long term retirement goals. Remember the 401(k) is no longer a supplement to a defined benefit plan but rather, for most Americans, the sole source of retirement funds

Comparing Your Plan vs. Competitors’ Plans – If the goal is truly to provide a benefit that makes the plan sponsor’s firm a better workplace than the plan sponsor’s competitors then: a) plan sponsors must know what’s unique about their plan; and, b) plan sponsors must know what their competitors offer. Of course, it’s often difficult for one plan sponsor to gather intelligence on another plan sponsor. This is where reliance on third party benchmarking providers becomes important. This is really the meat of the subject in the next two installments of this series.

Creating a written record of the 401k plan’s history forms the foundation for a good fiduciary compliance review. It can also reveal some cracks – like missing or outdated information – that might need to be filled in before moving on. Ultimately, it sets the table that will allow plan sponsors to independently benchmark their plans.

Without a benchmark analysis, how does a plan sponsor know if they have a good plan or not? In other words you need a scorecard to know th best players in the game.

Please comment or call to discuss how this affects you and your company retirement plan.