Even the most well‑constructed home needs periodic maintenance to prevent small issues from becoming larger, more costly problems. Your company's 401(k) plan is no different. Regular reviews and benchmarking are essential - even when everything appears to be running smoothly.

Benchmarking simply means comparing your plan's features, fees, investment performance, and participant outcomes against current industry standards. This process helps ensure your plan remains competitive, cost‑effective, and aligned with your fiduciary obligations under the Employee Retirement Income Security Act (ERISA).

How Often Should a 401(k) Plan Be Benchmarked?

Historically, many employers reviewed their plan every three years. However, increased fiduciary scrutiny, market changes, and evolving participant needs have led many advisors to recommend annual benchmarking. More frequent reviews help plan sponsors stay ahead of risks and make informed decisions that support participant outcomes.

Key Benefits of Frequent Benchmarking

1. Confirm fees remain reasonable and transparent.
Comparing your plan's costs to similar plans ensures participants receive fair value and helps protect employers from avoidable fiduciary exposure.

2. Evaluate investment performance and alternatives.
Markets shift rapidly - annual benchmarking helps ensure your investment lineup remains strong, diversified, and appropriate for your workforce.

3. Assess participant engagement and retirement readiness.
Gauging how well employees are using the plan can uncover opportunities for education, contribution enhancements, or automatic plan features.

4. Document fiduciary compliance.
Clear benchmarking records provide peace of mind and help demonstrate prudent oversight should your plan ever face regulatory review.

Need Support With Your Next Benchmarking Review?

Our team at Centauri Advisory Group would be glad to help you review your plan and prepare a benchmarking report tailored to your company's needs. If you'd like to schedule a consultation, we're here to support you.