The Department of Labor does not require 401(k) plan sponsors to complete a formal fee benchmarking review. What ERISA requires is that fiduciaries act prudently and ensure that plan fees are reasonable for the services provided.

Some providers use “mandatory benchmarking” as a sales tactic to make plan sponsors feel they are out of compliance. In reality, benchmarking can be a helpful tool, but it has limitations. A benchmarking report typically focuses only on fees and does not take into account the scope or quality of services being provided. For example, a plan might look more expensive compared to industry averages, but if it includes additional compliance oversight, hands-on support, or more robust technology, that may make the cost fully reasonable. We discuss this in more detail in our article The Art and Science of Fee Benchmarking.

If you’d like, our Sales Team would be happy to provide a complimentary benchmarking report so you can see how your plan compares on fees. Just remember that fees are only one piece of the overall fiduciary picture—services and support matter just as much.