For HR and Finance leaders at mid-sized organizations, reviewing and potentially switching 401(k) providers is more relevant than ever. As of 2025, U.S. 401(k) plans hold over $9 trillion in assets, serving 70 million participants (Investment Company Institute). Recent trends show that service quality concerns are a primary driver for change, with 23% of plan sponsors who switched providers in the past two years citing overall service as their main reason (napa-net.org).

With increased competition in the mid-market segment and ongoing shifts like Guideline’s acquisition by Gusto, employers are searching for alternatives that offer a better balance of pricing, flexibility, and support. For more background and tools, our 401(k) resources page offers a hub for employer-focused insights.

The Short Answer: What to Compare When Evaluating Alternatives

Choosing the right 401(k) provider means looking beyond brand names and focusing on the features that matter most to your business. According to a 2024 industry report, the top reasons plan sponsors switched providers were service quality (23%), organizational changes such as mergers or acquisitions (22%), growth in plan size (22%), plan investment fees (19%), and the desire for greater participant engagement (19%) (napa-net.org).

The most important comparison points for mid-sized employers include:

• Fees and Transparency: Understanding all-in costs and the difference between employer and participant fees.

• Flexibility: Assessing plan design options, customization, and investment menu governance, as investment variety—such as access to popular index funds—has become a key differentiator for employee engagement.

• Support Model: Evaluating the quality, responsiveness, and continuity of customer support.

• Implementation: Planning for the provider’s onboarding process, payroll integration, and timeline.

• Governance: Reviewing disclosures, documentation, and readiness for committee or fiduciary oversight.

The number of providers targeting mid-sized plans is also growing rapidly, giving employers more choice than ever.

When Employers Look for Alternatives: Common Triggers

It’s a question nearly every HR or Finance leader faces: when is it time to look for an alternative to your current 401(k) provider?

Recent analysis shows that significant organizational changes, such as mergers or acquisitions, often prompt employers to reevaluate their 401(k) relationships. Persistent service issues, lack of integration with payroll or HR systems, and unclear pricing are other common triggers, with recent studies revealing that hidden fees are surprisingly common.

Employers who experience these events frequently begin to seek out providers that better align with their new needs and growth.

The Evaluation Rubric: A Scorecard for 401(k) Provider Selection

To help mid-sized employers conduct a neutral, effective evaluation, use this scorecard approach, assessing each provider across key criteria.

Fees and Transparency (Employer vs Participant)

Too many employers focus only on headline pricing, overlooking the full picture of underlying fees and their impact on both the company and employees. According to independent research on plan size and costs, total 401(k) fees range from about 0.84% of assets for small plans (those with $25 million or less in assets) to about 0.40% for plans with more than $500 million in assets (The Pew Charitable Trusts, 2025), suggesting that mid-sized plans typically fall between those levels.

Benchmarking all fees and requiring clear disclosures helps avoid hidden costs and assures a fair deal for both employers and participants, including asset-based, per-participant, flat, and advisory fees.

For more, see our guide to 401(k) plan fees.

Flexibility (Plan Design, Advisor Coordination, Investment Menu Governance)

A flexible plan design can make a substantial difference for employers and participants alike. While specific case examples are scarce, industry case studies consistently show that tailored plan features—such as flexible eligibility, vesting, and diverse investment menus—can significantly boost participation and employee satisfaction.

Customization in plan design allows organizations to address unique workforce needs and support employee engagement, and leading providers also enhance plan flexibility by offering participant education and guidance.

For details on plan design flexibility, explore our 401(k) resources.

Support Model (Who Owns What, Response Times, Continuity)

The quality of provider support can make or break the employer experience. Industry reports emphasize that high-quality support from 401(k) providers is crucial for plan sponsors, and dissatisfaction with service is a leading reason for switching providers (napa-net.org).

When evaluating support models, consider response times, dedicated account contacts, and the availability of consultative support tailored for your company’s unique structure, as well as how the provider manages transitions or issues that arise.

For more on provider transitions, see our transition playbook.

Implementation (Timeline Planning, Payroll Mapping Kickoff)

A smooth transition depends on careful planning and integration between payroll, HR, and the new 401(k) provider. While specific timelines vary, industry best practices highlight the importance of integration to reduce administrative burdens and minimize errors—some leading providers support hundreds of payroll systems, making this process far simpler.

This step is especially important to avoid disruptions and help employees experience a smooth switch.

Check our step-by-step migration guide in the 401(k) resources hub for more.

Governance (Disclosures, Documentation, Committee Readiness)

Strong governance is essential to maintaining compliance and protecting both employers and employees. The SECURE 2.0 Act includes provisions effective in 2025, such as mandatory automatic enrollment for most new 401(k) and 403(b) plans established after December 29, 2022, and expanded eligibility for long-term part-time workers (cnbc.com). Staying up to date with these changes is critical for committee readiness and risk management, including recent updates to DOL fiduciary rules for investment advice.

For compliance and governance checklists, see our 401(k) resources.

Copy-Paste Questions for Demos and Proposals

When evaluating new providers, come prepared with a list of questions grouped by key rubric areas:

• Fees: What are all-in costs for employers and participants? Are there any hidden or asset-based fees?

• Flexibility: How customizable is the plan design? What investment menu options are available?

• Support: What are standard response times? Is there a dedicated account manager?

• Implementation: What is the typical onboarding timeline? How is payroll/HRIS integration handled?

• Governance: What disclosures and documentation are provided? How does the provider support compliance updates?

For a downloadable checklist and more RFP guidance, visit our 401(k) resources hub.

How to Run a Bake-Off in 2–3 Weeks: The Evaluation Process

Here’s how to efficiently compare providers and reach a confident decision:

1. Document Requirements: Clearly define your must-haves and nice-to-haves.

2. Shortlist Providers: Select a manageable list of candidates based on your criteria.

3. Schedule Demos: Arrange presentations with each provider to assess fit.

4. Conduct Reference Checks: Speak with current clients to learn about real-world experiences.

5. Draft a Decision Memo: Summarize findings and make a recommendation.

Communicate early and clearly with employees to maintain transparency throughout the process.

For a detailed provider transition checklist, see our resources.

If You Are Switching Due to the Acquisition News

Many employers begin considering a provider change after news of an acquisition. Industry analyses indicate that mergers and acquisitions often lead plan sponsors to reassess and potentially change their 401(k) providers to better align with new organizational structures, though plan sponsors should be alert to possible temporary service interruptions during the transition period.

For more on the Guideline acquisition, see our dedicated resource.

What to Verify First

Before making any changes, confirm the new provider’s compliance with regulatory requirements and their readiness to support your organization’s needs. The SECURE 2.0 Act’s new mandates make it particularly important to check that your provider is prepared for new compliance standards (cnbc.com).

See our acquisition checklist.

What Not to Rush

Rushing a transition can lead to data errors, participant confusion, and compliance failures: industry best practices consistently stress the importance of thorough planning and due diligence during provider changes.

For transition timing best practices, visit our resources.

Next Steps and CTA

Choosing the right 401(k) provider is a critical decision for mid-sized employers. By focusing on transparent fees, flexible plan design, responsive support, and compliance, you can make your retirement benefit a lasting advantage.

To learn more or to speak with our team, get started (for employers).

This content is for informational purposes only and is not legal, tax, investment, or compliance advice.

References

• Escalent. (2024). Retirement Planscape Report. https://www.napa-net.org/news/2024/7/new-reasons-switching-401k-recordkeepers-emerge/?utm_source=openai

• Investment Company Institute. (2025). 401(k) Resource Hub. https://www.ici.org/index.php/resource-hubs/401k?utm_source=openai

• Plan Sponsor Council of America. (2025). Mid-Market Plan Competition. https://www.psca.org/news/psca-news/2025/10/asset-managers-increasingly-competing-for-medium-sized-plans/?utm_source=openai

• The Pew Charitable Trusts. (2025). Small Employers' Economics of Offering Retirement Savings Plans. https://cri.georgetown.edu/wp-content/uploads/2025/10/10.-Small-Employers-Economics-of-Offering-Retirement-Savings-Plans-_-The-Pew-Charitable-Trusts.html?utm_source=openai

• CNBC. (2024). SECURE 2.0 Act Changes for 2025. https://www.cnbc.com/2024/11/23/401k-changes-2025.html?utm_source=openai