Benchmarking Beyond Fees

Why Employers Should Benchmark The Service They Receive from Retirement Plan Providers

When employers think about evaluating their 401(k) plans, they often focus on investment performance and participant engagement. But one of the most overlooked aspects of a healthy plan is how often you review and benchmark your service providers, including your recordkeeper, administrator, and consultant.  

Benchmarking isn’t just about ensuring competitive fees; it’s about making sure your plan is supported by the right team, tools, and technology to meet your organization’s evolving needs.

Benchmarking Best Practices

Every one to three years, it’s a best practice to benchmark your roster of retirement plan service providers. As we’ve discussed and demonstrated, ERISA language does not state you need to have the lowest plan costs; it highlights that plan costs must be reasonable for the services rendered. And while many plan sponsors equate benchmarking with fee comparisons, cost is only one piece of the puzzle.

Over time, assets grow, pricing structures shift, and new competitors enter the marketplace. But just as importantly, your business priorities and participant needs may evolve, which means the services that once fit perfectly may no longer be the best match for what you truly need today and going forward. In addition to business priorities and participant needs changing, record keeping and administration capabilities, their services offered, and legislation can also change over time, altering who may be offering the best services/resources.

We recommend that employers take a comprehensive approach to benchmarking. The goal is to help employers understand not only what they’re paying, but also what they’re getting in return. For our part, we prefer to evaluate both quantitative and qualitative factors:  

• How responsive is your provider?
• ‍How user-friendly is their website and mobile app?
• ‍Does your plan administrative provider invite you to offload administrative tasks, such as sending employee notices, approving loans and distributions, and so on, to them? ‍
• How seamless are the providers’ payroll integrations and reporting tools?

…and a host of other factors. We like to look at the consultant-client relationship holistically, to evaluate anyone and anything that impacts the quality of service being rendered.

A 360-Degree Look at Service Quality

To illustrate how this works, we have developed a proprietary comparison matrix that scores recordkeeping and administration providers across multiple categories, which we work with clients to benchmark providers against. These scores are based on our firm’s direct experience working with dozens of providers, along with the feedback we receive from our clients.  

Because LoVasco serves as an independent fiduciary, we don’t receive any incentive or compensation to favor one provider over another. Our sole objective is finding the best fit for each client.

Below is a simplified visual representation of the type of matrix we use:

This type of analysis allows us to clearly illustrate which providers excel in specific areas in a way that makes it easy and intuitive for clients to review each provider against their own unique priorities and preferences. For example, one provider may lead in technology and brand recognition, while another may stand out for its personalized service team and administrative support. Depending on what matters most to a given organization, those differences can help determine which partner best aligns with that organization’s unique goals.  

In other words, there is not one scorecard or score that tells the story for each and every company sponsoring a retirement plan.

Keeping Up With a Changing Marketplace

The retirement plan marketplace evolves constantly. Providers launch new digital tools, expand investment lineups, and adjust service models to better meet sponsor and participant needs. By maintaining and updating our matrix regularly—typically on a quarterly basis—we stay current with these developments. That means our clients can make informed decisions when the time comes to evaluate their plans.

Just as importantly, priorities can shift over time. A few years ago, you might have valued brand recognition and mobile accessibility above all else. Today, you may care more about having a provider that automates notices, integrates seamlessly with your payroll system, or offers flexible model portfolios. Benchmarking gives you an objective framework for re-evaluating what matters most at each stage of your company’s growth.

When Benchmarking Leads to Action

Benchmarking doesn’t always mean switching providers. Sometimes, the process validates that your current partner remains competitive on both price and service. But if the data suggests you could improve your plan’s experience or efficiency, we guide clients through a well-documented process to make informed changes.

If a plan sponsor wants to explore options further, LoVasco can facilitate a formal RFP process—gathering proposals, coordinating finalist meetings, and managing due diligence. Whether the outcome is staying with your current provider or moving to a new one, the key is that every decision is supported by data, documentation, and fiduciary rationale.

As an independent firm, LoVasco’s role is to act solely in our clients’ best interests. We don’t have financial incentives tied to any specific provider. Our benchmarking process is designed to demonstrate both prudence and transparency—two cornerstones of fiduciary responsibility. Every evaluation is documented to show the process, rationale, and ultimate decision.

A Smarter, More Confident Way to Manage Your Plan

Regular benchmarking helps ensure your plan’s service providers continue to deliver value, efficiency, and alignment with your organization’s goals. It also demonstrates to regulators and participants alike that your plan committee is exercising proper oversight.  

By taking the time every few years to review service and fees holistically, you’re not just protecting your company…you’re improving the experience for every employee who participates in your plan.

Want to see how your current retirement plan stacks up on these and other metrics? Take a quick assessment now to determine if you have the right fiduciary oversight and financial wellness process in place.