2025
DC Survey: Plan Benchmarking

Sponsors can use the report to compare their plan features and governance with peers’, for self-assessment and self-improvement.

State of the Industry

Size It Up

Trends in administration and design don’t apply to all plans equally.

When benchmarking defined contribution plans, it is important to compare apples with apples—considering plans in the same industry, of the same size and of the same type.

Among the 3,172 plan sponsors responding to the survey for the 2025 PLANSPONSOR DC Survey: Plan Benchmarking report, representing 46 different U.S. industries or sectors, nearly one-quarter have plan assets of less than $5 million; nearly half (45%) have assets in the $5 million to $50 million range; and the rest have assets topping $50 million. The majority (55%) of sponsors offer a 401(k) plan, while 6% offer a 403(b) and 15%, a 457 plan—either a 457(b) or a 457(f).

Many trends in the DC plan market are intrinsically related to, and can sometimes be attributed to, plan sponsor size and type.

The 2025 report shows, for instance, that the plans with the most assets are the most likely to use automatic enrollment, while just 20% of the smallest plans and less than half of plans with $5 million to $50 million in assets do so. In addition, nearly 100% of the largest plans have an investment committee, compared with 63% and 88%, respectively, for plans that fall within the two smallest asset ranges. Further, fees trend significantly lower for the largest plans.

Looking at plan type, the survey found that 403(b) and 457 plans are more apt to offer systematic withdrawals or other services for helping employees save than are 401(k)s—61% of 403(b)s, 79% of 457s and 45% of 401(k)s—or in-plan retirement income products, which are supplied by 29%, 55% and 7%, respectively. A substantial majority of 457 plans (60%) arrange for participants to meet one on one with a financial planner or an adviser outside of the plan compared with 403(b)s (33%) or 401(k)s (23%).

Considering Changes Driven by Benchmarking Findings

Most sponsors of Employee Retirement Income Security Act plans will benchmark plan and investment fees to fulfill their fiduciary duties. Yet, they, as well as non-ERISA-plan sponsors, conduct additional benchmarking to help them achieve particular goals for their plan.

Overall, the survey found that sponsors’ chief goal—the No. 1 reason they gave—for offering a defined contribution retirement plan was that the organization values helping employees save for retirement and become more financially secure (47%). The second most widely cited reason was to attract and retain talent (43.2%).

Considering its own type and size can help a plan determine how, or whether, to implement strategies it found intriguing in its benchmarking process. A small-plan sponsor wanting to improve plan governance, for instance, can benchmark by checking to see what others, in general, are doing. But by factoring in its size, it can evaluate whether those strategies will apply for its plan. It may observe in the survey that, overall, plans benchmark fees quarterly or hold quarterly committee meetings, but these might not be possible for smaller plans.

According to the survey’s findings, larger plans are the ones most apt to externally benchmark plan fees, to even have an administrative or investment committee, to provide fiduciary training to committee members and to have an investment policy statement.

Kristi K. Baker, managing partner in CSi Advisory Services, a division of Hub International, in Indianapolis, says, in her experience, smaller plans face the most challenges with managing time and workflow constraints, as their human resources staff may wear multiple hats and have many, varied job responsibilities. She suggests that hiring an experienced retirement plan adviser who serves as a fiduciary to the plan and the participants can greatly reduce a small employer’s liability and workflow and keep the plan in compliance and updated with new regulations.

Sean Kelly, a vice president and financial adviser with Heffernan Financial Services in Walnut Creek, California, says smaller plans can improve their governance by implementing a documented, repeatable process. Retirement plan responsibilities are essentially the same for all plans regardless of size, he notes. “Typically, smaller plans’ governance falls on one or maybe two people whereas larger plans have a bigger team, so, [for those smaller plans,] that repeatable process is an efficient way to implement best practice[s],” Kelly says. Supplying his clients with this type of “checklist” helps them know what to do and when and prompts them to document their steps, he says.

“One of the most notable trends I’ve seen is the increasing engagement of plan committees,” he says. “Regardless of the plan size, committee members are becoming deeply involved in all aspects of retirement plans. They are exploring available options, implementing solutions in the best interests of employees, and advocating for financial coaching to support employees’ overall financial well-being.” He says this heightened engagement reflects a growing focus on creating more effective employee benefits.

The type of organization sponsoring the plan is also key when that sponsor weighs ideas for plan changes based on trends it observed in its benchmarked findings.

For example, 47.1% of DC plan sponsors utilize automatic enrollment, the DC Survey found. However, many 403(b) plans may not adopt this feature due to state laws. Phil Sherman, senior retirement plan consultant, at Deschutes Investment Consulting LLC in Portland, Oregon, notes that auto-enrollment was authorized for the private sector through the Pension Protection Act of 2006, but public sector DC plans were left out of the legislation.

For public sector plans, each state is responsible for determining whether it will allow the practice, and many states have laws preventing its establishment. According to the National Association of Government Defined Contribution Administrators’ website, nine states permit auto-enrollment, 16 permit it in some cases, and 25 bar it.

Moreover, in terms of the DC survey findings—including with regard to trends—plan sponsor type can play a part.

One such example is whether the sponsor offers one-on-one meetings with an adviser. The survey found that more 457 and 403(b) plan sponsors have this provision than do sponsors of 401(k)s. Nonprofits, which typically sponsor 403(b) and 457 plans, have a culture of care, notes Kim Cochrane, director, client services, at Hub International MidAtlantic in Rockville, Maryland. “Face-to-face meetings are welcomed and encouraged by leadership of these organizations,” she says.

Cochrane also says she finds that 403(b) plan sponsors are more likely than are 401(k) sponsors to provide a higher employer contribution, immediate 100% vesting and the offer of in-plan retirement income products. She says higher contribution rates are a carryover from the time when nonprofits paid lower salaries, so they compensated with exceptionally rich benefit programs. Nonprofits’ salaries are now more commensurate with the market, she says, but benefits are still rich. Retirement benefits can be a strong tool for employee attraction and retention, she adds.

General Trends

Some trends, however, appear among plans of all types and sizes. “We have continued to see employers reduce the waiting period time for employees to enter the plan, to assist with recruiting,” Baker says.

Kelly says he is seeing vesting and eligibility requirements becoming more employee friendly. “Many plans were originally set up years ago, and the vesting and eligibility rules for employer contributions were often decided with minimal thought—sometimes in just 30 seconds during a plan document setup call,” he says. “At the time, employers tended to select the most restrictive options, knowing they could always loosen them later.”

Now, he says, as the marketplace has grown more competitive, in efforts to attract and retain top talent, employers increasingly place greater emphasis on employee well-being, moving away from a solely profit-focused approach to one that is more employee-centric. “Financial health has become a significant part of that equation, driving the trend toward more flexible and inclusive plan features,” Kelly says.

Many employers are still cost-conscious, though, keeping in mind their budget before implementing a change spotlighted by benchmarked findings. For example, while governments, nonprofits and corporations may all want to reward key nonqualified plans to aid in that purpose.

“I think for-profit chief financial officers may be very hesitant to add a company liability to the balance sheet, whereas a nonprofit with more regular secured funding may have a stronger appetite for taking that risk on,” Sherman says.

Despite the particular considerations that exist for plan sponsors of each size and/or type, Kelly’s firm has observed significant changes in plan design, fees and governance across all plans, he says. “As our industry has evolved, there have been key inflection points—shifts from insurance products to mutual funds, proprietary to nonproprietary requirements, the adoption of target-date funds as the [qualified default investment alternative] and greater fee transparency,” he says. “In my view, we’re now at another pivotal moment, driven by the impact of both SECURE [Setting Every Community Up for Retirement Enhancement] acts and the emergence of lifetime income solutions.”

—Rebecca Moore



2025 PLANSPONSOR DC Survey Plan Benchmarking and Industry Reports

Our 2025 Plan Benchmarking and Industry Reports feature proprietary data collected by PLANSPONSOR in its annual Defined Contribution Survey. The reports highlight various plan design features and outcomes from 6 plan types and 48 industries.

You can leverage the 2025 PLANSPONSOR Reports* to:
  • Build trust with advisers and provide new tools to your staff and network
  • 100+ pages in PDF format
  • Compare plan design with peers and competitors, and improve fiduciary oversight
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Contact Rob Reif / 212-217-6906 / robert.reif@issmediasolutions.com