Is Your Company’s 401(k) Still Competitive?
Why Your 401(k) Matters More Than Ever
Employee expectations around benefits have changed. While health insurance continues to be a priority, retirement benefits remain one of the most valued offerings for attracting and retaining talent. A competitive 401(k) demonstrates that you’re investing in your employees’ future while strengthening your overall benefits package.
However, offering a retirement plan isn’t a “set it and forget it” benefit. Investment performance, administrative costs, employee participation, and compliance requirements all change over time. If you haven’t reviewed your plan recently, it may no longer meet the needs of your workforce or your business.
What Should Employers Review Each Year?
An annual review is an opportunity to make sure your retirement plan is working as intended. Start by evaluating whether employees are participating in the plan and contributing enough to take advantage of any employer match. Low participation could signal that employees need more education or that your plan design should be updated.
It’s also important to review your investment lineup and associated fees. Employees increasingly expect diversified, cost-effective investment options, and employers have a fiduciary responsibility to monitor those investments over time. Even small differences in fees can have a significant impact on retirement savings over the long term.
Finally, take a step back and consider whether your plan still aligns with your business. If your workforce has grown, you’ve expanded into new locations, or you’ve made changes to your compensation strategy, your retirement plan may need to evolve as well.
Don’t Overlook Compliance
Beyond providing a valuable employee benefit, sponsoring a 401(k) also comes with important responsibilities. Employers are responsible for ensuring their plan complies with Internal Revenue Service (IRS) and Department of Labor (DOL) regulations, follows the terms outlined in the plan document, and completes required reporting and testing.
Missing deadlines, failing nondiscrimination testing, or overlooking required notices can create unnecessary administrative headaches and potentially costly penalties. Conducting regular reviews helps identify issues early while giving employers confidence that their plan continues to operate as intended.
How a PEO Makes Retirement Plans Easier to Manage
As your business grows, managing retirement benefits becomes increasingly complex. Between payroll deductions, compliance requirements, employee questions, plan administration, and annual reviews, keeping your 401(k) competitive requires ongoing time and attention. For many small and midsize businesses, those responsibilities fall on owners or HR teams who are already juggling countless other priorities.
Partnering with a professional employer organization (PEO) allows businesses to simplify retirement plan management while strengthening their overall employee benefits strategy. Rather than managing every administrative detail internally, employers gain access to experienced HR professionals who help oversee retirement plan administration, coordinate payroll integration, support compliance efforts, and provide employees with resources to better understand their benefits. This allows business owners to spend less time navigating complex retirement regulations and more time focusing on running and growing their business.
Simplify Your Retirement Benefits with GMS
A competitive 401(k) can help your business attract quality candidates, improve retention, and demonstrate a long-term investment in your employees. But maintaining an effective retirement plan takes more than offering one. Regular reviews, ongoing compliance, and thoughtful plan management are all essential to ensuring your retirement benefits continue to deliver value.
At Group Management Service (GMS), we help businesses take the complexity out of retirement plan administration. As a PEO, GMS combines retirement solutions with payroll, HR, benefits administration, and compliance support to create a more streamlined experience for employers. Whether you’re evaluating your current 401(k), looking to reduce administrative burdens, or building a more competitive benefits package, GMS provides the expertise and support to help your business and your employees prepare for the future.