Beyond Traditional Measures

The definition of retirement plan success is evolving to include new considerations weighed against additional context.

As retirement plan design and employee expectations continue to evolve, traditional measures of defined contribution plan success—participation rates, average deferral rates and match utilization—no longer provide a complete picture of how well a plan is supporting financial security.

In the 2025 PLANSPONSOR Defined Contribution Survey, 90.2% of all DC plan sponsors reported they use participation rates to measure the success of their plans. More than six in 10 (61.0%) use average deferral rate, and more than half (51.5%) use the percentage of participants saving enough to receive the full match from their employer.

The Pension Protection Act of 2006 offered plan sponsors several tools to help boost the participation rate and deferral rates within plans. The law, marking its 20th anniversary this year, sanctioned automatic enrollment and automatic escalation of salary deferral. In the 2025 DC Survey, half of all plans reported offering automatic enrollment, and nearly one-quarter reported offering automatic deferral escalation.

Rob Massa, the retirement practice leader for the Houston market at Prime Capital Retirement, emphasizes the importance of establishing internal benchmarks, rather than relying solely on industry comparisons.

“The first thing I ask employers is, ‘What are you trying to achieve? Set your own goal. What participation rate are you striving for—80%? 90%? 95%?’” Massa says. “Participation and average deferral rates, when compared to other companies, are essentially meaningless statistics. If your participation rate is 72%, that still means 28% of your employees are not saving for retirement. More than a quarter of your workforce is not ready—period.”

Industry benchmarks only go so far, he adds. Massa advises sponsors to consider with whom they truly compete.

“If my nearest direct competitor is a thousand miles away, they’re not likely to steal my employees—but someone else will,” he says. “You should benchmark contributions against companies competing for your talent—not just those in your industry.”

Moving Beyond Raw Averages

Instead of chasing industry averages, Massa encourages plan sponsors to focus on outcomes directly tied to retirement readiness. The survey results indicated that such measures of plan success are taking hold.

More than three in 10 respondents (31.3%) indicated they measure success by the percentage of participants on track to meet projected monthly income goals in retirement, up from 25.2% in the 2024 survey. Another 21.0% reported measuring the percentage of participants meeting retirement income replacement goals, up from 17.9% in the prior year’s survey.

“Income replacement ratios aren’t perfect—we know participants don’t enter all their assets—but it’s something we can hang our hat on,” Massa says.

To get to these retirement goals and to move beyond measuring raw averages, Massa recommends identifying the proportion of employees saving at an optimal level.

“I call it the Goldilocks zone—usually somewhere between 12% and 20% of pay,” Massa says. “Not too little, not too much—just right.”

He says plan sponsors should determine what percentage of their workforce is already in this zone; establish targets for year-over-year improvement; and monitor both non-participants and under-savers separately.

“Right now, if you’ve got 8% of your workforce in the window, set a goal to get to 12% next year and 15% the year after,” Massa says. “Show measurable improvement. That matters more than any industry comparison.”

For Sean Bjork, president of Bjork Asset Management, the next layer of plan success metrics includes evaluating automatic features more deeply.

“If we are utilizing auto features, we need to look at how well they’re working—capture rate, opt-out rate, auto-increase success,” Bjork says. “Anything over a 10% opt-out rate would start to raise concerns.”

Bjork also recommends periodic re-enrollment: “If someone opted out 10 years ago as a new hire, that may no longer be the right answer. Give them another chance to say no.”

Additionally, Bjork says it is important to measure participant engagement with the plan. Beyond saving behaviors, recordkeepers can provide rich data on how—and how often—participants interact with their accounts.

“Are we visiting our money? Do we know how to access the website?” Bjork asks. “If we do, what are we doing when we get there?”

He says this level of engagement can be measured through:

• Registration rates;
• Quarterly unique website visitors;
• Use of tools, such as projections vs. loan calculators; and
• Call center volume and topic trends.

According to Bjork, these behaviors not only reflect participant interest and understanding—they also guide better education strategies.

“If I know the top two or three things participants are looking for on the website, I can deliver more targeted, more impactful education, because I already know what they need,” Bjork explains.

Considering Financial Wellness in Plan Design

A major new component of this year’s survey explored financial wellness offerings. Historically considered optional, these benefits are increasingly integrated into retirement programs—and even reflected in federal law. New legislation has paved the way for emergency savings accounts, student loan repayment matching and new hardship reasons, among other things.

According to the survey, 34.8% of DC plan sponsors offer an integrated financial wellness program, and 46.5% are at least somewhat likely to implement or expand a financial wellness program in the next two to three years.

The broader DC survey found that 60.9% of DC plan sponsors agree with the statement, “Our company has a responsibility to improve the ‘financial wellness’ of our employees.”

“I agree [financial wellness offerings] should become table stakes,” Massa says. “But whether [they] actually will is less clear.”

Massa distinguishes between cohesive, strategic financial wellness programs and collections of recordkeeper tools with no structure behind them. Most recordkeepers provide free tools, but, Massa warns, “They won’t be used if the employer doesn’t establish a program around them. Sometimes the right answer is a dedicated financial wellness vendor.”

Bjork cautions that some offerings blur the line between support and sales.

“A lot of products masquerade as financial wellness benefits,” he says. “If someone is in financial hardship, selling them something is not the answer.”

Bjork says he expects financial wellness to become “table stakes,” but the delivery model will vary. He notes that today’s approaches fall into four broad categories:

• Recordkeeper-integrated tools;
• Adviser-delivered education or coaching;
• Stand-alone third-party solutions; and
• Product-driven programs tied to sales.

“The business case for offering some form of wellness support is compelling,” Bjork says. “But sponsors need to figure out where advice and guidance fit—and ideally choose a model where no product sales are involved.”

Nearly three in 10 (29.5%) respondents to the financial wellness portion of the 2025 DC Survey reported that competitive employment market pressures are the biggest driver for their organization to consider an integrated wellness program. However, Massa points out that financial stress often prevents employees from saving adequately. Helping them stabilize their finances supports retirement readiness.

“If you're contributing 0% [to your DC plan], I’d rather you do 1% than nothing,” Massa says. “Dip your toe in. [But] if you try to jump to 10%, you’ll go right back to zero.”

Massa says financial basics—budgeting, emergency savings and staged education tied to life events—should be integrated into plan success strategies.

“Budgeting should be a natural part of onboarding—just like learning about health insurance,” Massa says. “It should all be part of one wellness pyramid, with financial wellness at the top.”

When employees understand and manage their money, he feels, retirement outcomes improve naturally.

“If I can create more room in someone’s budget, they can pay themselves more—without feeling the hit to takehome pay,” Massa explains.

Massa says one of his mentors summed it up this way: “At the end of the day, the resource pie is the resource pie. A budget is just a pie. You have to figure out how to make everything fit.”

—Rebecca Moore