Annual Reviews – Setting the Foundation for a Stronger 401(k) Program

As we move into the new year, many organizations are looking for ways to refine their strategies to attract and retain top talent. One of the most effective steps your leadership team can take is conducting an Annual 401(k) Review meeting. These reviews are a cornerstone of a well-run retirement plan, providing an opportunity to evaluate performance, identify areas for improvement, and set the direction for the upcoming year.

Think of this meeting as the foundation for your company’s 401(k) program. When done thoughtfully, it ensures the plan remains aligned with your organization’s goals and continues to provide meaningful value to your employees.

What Happens During an Annual 401(k) Review?

This meeting is a critical moment for plan fiduciaries to:

  • Evaluate the Investment Lineup: Review all available options to ensure they are meeting performance benchmarks and aligned with the plan’s investment objectives. Assess fees to ensure they remain competitive and reasonable.
  • Assess Compliance and Documentation: Confirm the plan is in compliance with current regulations and document any changes or updates made during the review. This step is crucial for managing fiduciary responsibilities.
  • Review the 401(k) Investment Policy Statement (IPS): Ensure the IPS reflects your current goals and strategy. Adjustments may be needed to align with evolving objectives or changes in the investment landscape.
  • Evaluate Service Providers: Take a closer look at the plan provider, third party administrator, and financial advisor. Are they delivering the value and service your plan needs? Are their fees still appropriate relative to the services they provide?

Why Are These Reviews So Important?

Regular plan reviews are more than just a regulatory checkbox. They’re a chance to ensure your 401(k) remains a competitive advantage in your benefits package. Employees are increasingly looking to their employers to offer retirement plans that are not only robust but also thoughtfully managed.

In fact, 84% of employees want to rely on their employer to deliver the best benefits available, according to Franklin Templeton’s “Voice of the American Worker” survey. Your team’s ability to align the plan with employee expectations can directly impact your efforts to attract and retain top talent.

Looking Ahead

By conducting an annual review, you demonstrate a commitment to providing your employees with a well-structured retirement plan while protecting your organization’s fiduciary standing. This proactive step sets a strong foundation for the year ahead, ensuring your program continues to evolve with your company’s goals and workforce needs.

If you haven’t scheduled your Annual 401(k) Review meeting yet, now is the time. Let’s work together to make your 401(k) program a key element of your company’s success story this year.

If you would like to discuss best practices or need help conducting your annual review, you can schedule time with me here.