PLANSPONSOR - December 2022-February 2023 - 21

increase participation, because getting people into the plan
is important. However, another plan with high participation
might be focused on increasing savings, improving diversification
or decreasing leakage. "
Metrics Matter
The demographics of the plan may also affect the metrics used in
benchmarking plan design. An employer focused on attracting
new college graduates, for example, might explore changing
its 401(k) to incorporate a student-loan matching program,
Austin says. An employer with an emphasis on diversity, equity
and inclusion initiatives might want to benchmark participant
behavior based on race or ethnicity.
Plan demographics also play into understanding benchmarks,
Austin says. Rather than concentrating on averages, plan
sponsors and their advisers can dig into the data to study performance
by age, race, gender or tenure to make comparisons with
participant peer groups in other plans.
Considering the plan's performance toward its objectives
and participant progress toward outcomes can make the benchmarking
process more meaningful. It might be a mistake, for
example, for a sponsor to focus only on its 401(k) match and
ignore other retirement benefits, such as a defined benefit plan
or a nonelective contribution, Austin says.
Peer Comparisons
Besides looking at industry averages, it is critical to benchmark
the plan against peers that draw from the same labor pool.
" From a plan design perspective, it's important, because
workers are always going to evaluate different places to work
within their industry, " Austin says. " Plan sponsors don't want to
be too far behind their competitors, because that runs the risk of
not attracting and retaining the best talent. "
Participation, engagement levels, match rates and eligibility
are among the most common metrics plan sponsors consider
when comparing their plans with other employers. And plan
sponsors are willing to pay more to a recordkeeper that can
outperform on those benchmarks, Austin adds.
" They are really focused on retaining good employees and
how they can make their plan more attractive than the next
guy's, " says Power. " Benchmarking is one way to make sure your
plan is supercompetitive. "
In a volatile market, benchmarking can also help put plan
performance in perspective. " It's generally a bad thing to see the
plan's average balance drop by 5% from the prior year, " Austin
says. " However, if everybody else's dropped by 15%, the 5%
doesn't look so bad. "
The benchmarking process increasingly includes a look at
the technology that recordkeepers or advisers use. It has become
more common for plan sponsors to ask about payroll integration,
preferring vendors that can automate that part of the process,
and query whether a recordkeeper can access additional participant
assets from other recordkeepers, for instance.
Respondents, by Plan Size
<$10mm
50%
$10mm - $50mm
>$50mm - $200mm
>$200mm - $1b
>$1b
13%
8%
6%
Respondents, by Plan Type Offered
401(k)
403(b) 5%
457 5%
ESOP*/KSOP†
2%
Money purchase 1%
NQDC‡
Profit sharing
SIMPLE§
*Employee stock ownership plan. †
ESOP. ‡
6%
12%
1%
Other 2%
Nonqualified deferred compensation. §
for employees.
Respondents, by Plan Type Offered
Banking/Financial services
Building/Construction/Contracting
Government 2%
Health care
Law firm
Manufacturing
Retail 5%
Technology/Telecommunications 3%
Wholesale/Distribution 4%
All other industries*
*35 additional unique industries.
Combines features of a 401(k) and an
Savings incentive match plan
23%
66%
8%
7%
8%
5%
13%
45%
PLANSPONSOR.COM December 2022 - February 2023 21
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PLANSPONSOR - December 2022-February 2023

Table of Contents for the Digital Edition of PLANSPONSOR - December 2022-February 2023

INSIGHTS
RULES & REGULATIONS
PARTICIPANT ANALYSIS
UPFRONT
Risk Protection
Benchmarking Beyond Fees
Exploring ESG Investing
In Case of Emergency
Employee-Owned
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover1
PLANSPONSOR - December 2022-February 2023 - Cover2
PLANSPONSOR - December 2022-February 2023 - 1
PLANSPONSOR - December 2022-February 2023 - INSIGHTS
PLANSPONSOR - December 2022-February 2023 - 3
PLANSPONSOR - December 2022-February 2023 - RULES & REGULATIONS
PLANSPONSOR - December 2022-February 2023 - 5
PLANSPONSOR - December 2022-February 2023 - 6
PLANSPONSOR - December 2022-February 2023 - PARTICIPANT ANALYSIS
PLANSPONSOR - December 2022-February 2023 - UPFRONT
PLANSPONSOR - December 2022-February 2023 - 9
PLANSPONSOR - December 2022-February 2023 - 10
PLANSPONSOR - December 2022-February 2023 - 11
PLANSPONSOR - December 2022-February 2023 - 12
PLANSPONSOR - December 2022-February 2023 - 13
PLANSPONSOR - December 2022-February 2023 - Risk Protection
PLANSPONSOR - December 2022-February 2023 - 15
PLANSPONSOR - December 2022-February 2023 - 16
PLANSPONSOR - December 2022-February 2023 - 17
PLANSPONSOR - December 2022-February 2023 - Benchmarking Beyond Fees
PLANSPONSOR - December 2022-February 2023 - 19
PLANSPONSOR - December 2022-February 2023 - 20
PLANSPONSOR - December 2022-February 2023 - 21
PLANSPONSOR - December 2022-February 2023 - 22
PLANSPONSOR - December 2022-February 2023 - 23
PLANSPONSOR - December 2022-February 2023 - 24
PLANSPONSOR - December 2022-February 2023 - 25
PLANSPONSOR - December 2022-February 2023 - 26
PLANSPONSOR - December 2022-February 2023 - 27
PLANSPONSOR - December 2022-February 2023 - Exploring ESG Investing
PLANSPONSOR - December 2022-February 2023 - 29
PLANSPONSOR - December 2022-February 2023 - 30
PLANSPONSOR - December 2022-February 2023 - 31
PLANSPONSOR - December 2022-February 2023 - 32
PLANSPONSOR - December 2022-February 2023 - 33
PLANSPONSOR - December 2022-February 2023 - In Case of Emergency
PLANSPONSOR - December 2022-February 2023 - 35
PLANSPONSOR - December 2022-February 2023 - Employee-Owned
PLANSPONSOR - December 2022-February 2023 - 37
PLANSPONSOR - December 2022-February 2023 - FIDUCIARY FORUM
PLANSPONSOR - December 2022-February 2023 - INSIDE ANGLE
PLANSPONSOR - December 2022-February 2023 - PLAN PROFILE
PLANSPONSOR - December 2022-February 2023 - Cover3
PLANSPONSOR - December 2022-February 2023 - Cover4
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