2021
DC Plan Benchmarking Survey

Respondent Profile

Plan Sizes

It has long been known that plan size correlates to differences in plan design, with larger plans—i.e., those with $200 million or more in plan assets—adopting more progressive features long before their smaller counterparts. Larger plans were among the first to adopt automatic enrollment and remain twice as likely to offer the feature today. They also come with a size and scale that can lead to higher levels of plan oversight and lower investment fees. Collectively, plan size may be the most important yardstick by which to benchmark your retirement plan.

Plan Types

The 401(k) plan is by far the most common employer-sponsored retirement plan. Not surprisingly, this also means that 401(k) plan benchmarking data is often easier to come by than similar data focused on 403(b), 457 or other retirement plans. However, plan types—like industries—are commonly connected to specific employee populations. They are also subject to different regulatory requirements. Combined, these factors can lead to different plan design considerations, most notably in areas related to eligibility, retirement income creation, and in-person advice and guidance.

Plan Providers

Many DC plan recordkeepers service thousands of plans, allowing them to construct proprietary benchmarks based on actions their clients take. But this may also exhibit “hidden” bias, as clients share the common trait of having self-selected into the same grouping—e.g., the charts below show adoption of certain plan features based on responses from six recordkeepers similar in survey counts and response profiles. The range of values highlights the potential limitations of single-provider benchmarks and reinforces the key role independent, cross-provider sources play in the process.

Geography

Recent politics might lead some sponsors to believe their plan designs need to account for regional leanings. However, many design features show only small differences in adoption when viewed on a regional basis. While common plan success measures—e.g., plan participation rates, participant deferral rates and average participant account balances—are consistent across many regions, it is worth noting that Southern states underperform their peers in these areas, which suggests that sponsors in that region may want to consider other factors when looking to improve outcomes.

Industry

Employers primarily compete for talent within an industry context and need to offer retirement programs that attract and retain the right people, which means finding a relevant group of peers/competitors is a critical part of any plan benchmarking exercise. For example, employees of retail organizations likely have needs and expectations that differ from those in white-collar industries such as law firms. So that gives rise to differences in plan design—e.g., law firms are more likely to use re-enrollment and offer profit-sharing contributions and Roth conversions.