Measuring the health of your organization's retirement plan: 5 key considerations

1. Have you evaluated your retirement plan design?

One of the fundamental questions to ask when assessing the effectiveness of your retirement plan is: Does the plan design align with your organization’s needs and objectives? Striking a balance between the retirement savings needs of your employees and your organizational goals is key to building an optimal retirement program.

Designing your retirement plan with the right features isn’t just a smart move—it can be a game-changer. When you incorporate tools like automatic enrollment and automatic escalation, you’re removing some of the biggest roadblocks that keep employees from saving. These features help more people start saving earlier and keep increasing their contributions over time, which naturally boosts participation and deferral rates.

But it doesn’t stop there. Tailoring your plan to match what your employees actually need—like Roth options, faster vesting, earlier entry and generous employer matches and profit-sharing contributions—can boost engagement and satisfaction.

If your plan includes loans, it’s worth reviewing your policy to make sure it’s fair but limited. Consider whether offering both loans and hardship withdrawals is necessary. The goal is to help employees handle life’s unexpected bumps without putting their long-term savings at risk or causing account shrinkage from loans and early withdrawals.

At the end of the day, thoughtful plan design leads to a healthier retirement plan. And that can mean smoother annual testing, positive plan metrics and more financially confident employees.

2. Are you meeting your fiduciary responsibilities?

As a plan sponsor, you take on key fiduciary responsibilities under the Employee Retirement Income Security Act of 1974 (ERISA). You’re expected to act in the best interest of your employees and their beneficiaries, manage the plan with care and diligence, follow the plan’s rules and stay compliant with all applicable laws. It also means keeping plan fees reasonable and offering a well-diversified investment lineup.

These aren’t simply check-the-box requirements—they’re essential to protecting your employees’ long-term financial security and building trust in your organization. When you fully understand and embrace your fiduciary role, you help ensure the plan is run efficiently, investments are sound and your employees are better positioned for a secure retirement. Conversely, missing the mark can result in costly errors—poor investment choices, high fees or administrative oversights—that can chip away at employee savings and open the door to legal risk.

But you don’t have to shoulder it all alone. Outsourcing fiduciary duties can be a smart, strategic decision for plan sponsors looking to reduce liability and enhance plan oversight. By partnering with experienced third-party fiduciaries, you can delegate specific administrative or investment responsibilities to professionals with strong knowledge of regulatory requirements and industry standards. This can lead to more efficient plan management and reduced legal exposure.

You still need to carefully select, monitor and evaluate your providers to ensure they’re acting in the best interest of your participants. And as you’re monitoring the health of your retirement plan offering, coordinate with both your plan provider and legal counsel to ensure all fiduciary and legal requirements are being met.

When done right, outsourcing can help simplify plan management, strengthen your governance structure and ultimately deliver better retirement outcomes for your employees.

3. Are your plan’s investment performance, fees and service levels aligned with industry standards?

Evaluating the health of your retirement plan includes a clear look at investment performance, plan fees and service quality. Benchmarking these elements against industry norms helps you determine whether your plan is truly competitive—and whether it's delivering meaningful value to your employees.

Let’s start with investment performance. This isn’t something to tackle alone—partnering with an investment professional is key. At minimum, you should compare each fund’s returns to relevant market indices and peer group averages. But you should also assess risk and consistency over time to determine how well the investment lineup is safeguarding and supporting the long-term financial security of your participants.

Benchmarking fees is equally important as high costs can quietly and gradually erode retirement savings. That’s why it’s essential to review the full cost of your plan—investment fees, recordkeeping expenses, advisor compensation—and compare them to benchmarks for similar-sized plans in your industry. If you’re paying more than peers for the same services, it’s a red flag, both for plan value and fiduciary compliance.

Finally, don’t overlook service quality. Strong plan performance isn’t just about numbers—it’s about experience. Benchmark your plan providers on things like participant education, communication and digital tools, along with access to support call centers and relationship managers for a well-rounded view of how your plan compares to others in the market.

When you take a holistic approach to benchmarking your investment offering, you gain a clearer picture of where your plan stands, where it can improve and how to better serve your employees. It's a smart move for plan performance and participant outcomes.

4. How are you monitoring plan participation and performance?

Keeping a close eye on key retirement plan metrics isn’t just a best practice—it’s essential for evaluating plan effectiveness and ensuring participants are on track for retirement. The right data tells you whether your employees are engaged, saving effectively and set up for long-term success.

The participation rate metric reveals how many eligible employees are actively contributing to the plan. It's calculated by dividing the number of contributing participants by the total number of eligible employees. A participation rate above 70% is generally considered healthy and signals strong employee engagement. If participation is on the low side, features like automatic enrollment and targeted education can help move the needle.

The contribution rate and deferral rate are closely related metrics that reflect how much employees are saving. The contribution rate includes both employee and employer contributions. The deferral rate tracks the percentage of pay employees are choosing to set aside. By averaging these across your participant base, you can benchmark performance against industry standards (often 6–10% for deferrals and 10–15% for total contributions). If you're not seeing numbers within these ranges, it may mean employees aren’t saving enough and trying strategies like auto-escalation or personalized communication might be beneficial.

Don’t overlook Target Date Fund (TDF) utilization for assessing investment behavior. TDFs simplify investing by automatically adjusting asset allocations as employees near retirement. Utilization is calculated by dividing the number of participants invested in TDFs by the total number of participants. High utilization (often 70% or more) usually points to a well-designed plan and successful employee communication.

These metrics are a window into how your retirement plan is supporting your employees. Regular benchmarking and thoughtful plan design adjustments can make a meaningful difference in helping your employees retire with confidence.

5. How can you improve retirement readiness with education?

Effective 401(k) education programs empower employees to make informed decisions about their retirement savings by offering clear, personalized and accessible information. These programs often include interactive tools, targeted communications and one-on-one guidance to help participants understand their options, assess their retirement readiness and take meaningful action toward their financial goals.

The most effective education programs provide personalized insights that show employees exactly where they stand and what they can do to improve. Tools like projected retirement income estimates, savings gap analyses and tailored action steps help bring the big picture into focus. When employees see how their current savings stack up against future income needs, they’re far more likely to engage—whether that’s increasing contributions or adjusting their investments.

Successful strategies use a mix of channels—interactive calculators, mobile apps, webinars and one-on-one support—to meet employees where they are, helping them engage with their retirement planning on their own terms. The more accessible and relatable the experience, the more likely it is to drive action.

Tailored communication is also key. Segmenting your messaging by career stage or behavior makes it easier to deliver content that resonates. For example, employees just starting out might respond to content about building wealth and the power of compounding, while employees closer to retirement may appreciate guidance on catch-up contributions and income planning.

To truly understand the impact of your education and engagement efforts, monitor shifts in metrics such as participation rates, deferral increases and TDF utilization before and after implementing your initiatives. These metrics provide a clear view of what educational efforts are inspiring employees’ behavior change.

In addition to the numerical data, surveys and feedback tools can give you qualitative insights into employee confidence, satisfaction and understanding, adding valuable context to your metrics by helping you identify which aspects of the program are resonating and where further support may be needed.

A strategic, data-informed approach paired with personalized education allows you to more effectively guide employees toward better retirement outcomes while reinforcing your role as a proactive, responsible fiduciary.

Work with your retirement plan provider to build a better offering for your employees.

As you review your organization's benefits offering each year, it’s wise to take a moment to consider the ways you can improve your retirement plan to better meet the needs and goals of your employees.

Your ultimate goal: Ensure that your offering provides employees with the flexibility and growth potential they need to safely plan for retirement, while simultaneously reducing your organization's exposure to risk and minimizing plan maintenance fees.

Your plan advisor should be able to guide you in implementing solutions that work for your employees and your organization.

At Associated Bank, we have over 50 years of experience in assisting employers as they navigate the journey of empowering their employees to achieve a secure retirement. Our personalized, partnership approach helps deliver a retirement plan program that gets results.

If you’d like to speak with an experienced retirement plan advisor who can guide you on your path to improving your benefits offering, schedule an in-person appointment with one of our local consultants.

Together, we can help you position your organization to raise team member satisfaction and improve employee retention, while making managing your retirement plan easier and more efficient.