For HR and Finance leaders at companies with 250–1,999 employees, understanding how your 401(k) plan stacks up is more than a compliance exercise, it's a strategic imperative. Regular benchmarking of your 401(k) plan’s fees, participation rates, and design features can support talent acquisition, retention, and long-term financial wellness for your workforce. At Basic Capital, we help mid-sized employers navigate these decisions with clarity, transparency, and a focus on measurable outcomes.
401(k) benchmarks, mid-sized employer retirement plan fees, and 401(k) participation rates 2024 are no longer just buzzwords, they’re actionable signals that can drive tangible improvements in plan health and employee engagement.

A Short List of Meaningful 401(k) Benchmarks for Mid-Sized Employers

When it comes to assessing your 401(k) plan, focusing on a few key benchmarks helps you track what matters most. Regular benchmarking keeps your plan competitive and compliant, supporting talent strategies and plan health.

As industry experts note, “Regular benchmarking transforms your 401(k) plan from a compliance checklist into a powerful driver of employee engagement and organizational competitiveness.”

• Fee Reasonableness: The average all-in 401(k) fee for mid-sized plans typically falls between 0.40% and 0.84% of assets, based on recent industry data for small and large plans (401kspecialistmag.com; napa-net.org). While fees have generally declined, overpaying remains a common issue, recent reports suggest that up to 80% of companies with 100+ employees still pay more than necessary for plan administration (hrdive.com).

Even a seemingly small fee difference can translate into a significant gap in retirement savings over time.

• Participation & Engagement: Recent data show about 82% participation among eligible workers in Vanguard-administered plans in 2024, but mid-sized companies that adopt features like automatic enrollment or employer matching usually see higher engagement.

• Plan Health Metrics: Beyond participation and fees, look at employee deferral rates (percent of salary contributed), plan “leakage” (early withdrawals/loans), and nondiscrimination testing outcomes to gauge the overall effectiveness of your plan.

Being transparent about all fees, including hidden charges like revenue sharing arrangements, helps avoid surprises and build employee trust.

For specific strategies related to how fees scale as your business grows, see our guide on 401(k) Plan Fees Explained: How Costs Scale as Your Business Grows.

Fee Reasonableness: What “Good” Looks Like for Mid-Sized Plans

Are our 401(k) fees reasonable for our company size?

It’s a question nearly every employer faces as they seek to balance cost, quality, and fiduciary responsibility. Industry data suggests that mid-sized employers should expect all-in 401(k) fees to fall between 0.40% and 0.84%, lower than small plans, but often higher than the largest corporate plans (401kspecialistmag.com).

Even a 1% difference in fees can reduce an employee’s retirement savings by up to about 28% over a 35-year career, according to the U.S. Department of Labor.

Fee reasonableness isn’t a fixed number, it’s about benchmarking your plan against similar organizations, reviewing costs regularly, and making sure all fees (including revenue sharing, administrative, and investment expenses) are clearly disclosed and justified.

Regular fee benchmarking supports best practices, fiduciary responsibilities, and helps companies avoid potential legal issues.

For practical details, review our mid-sized employer fee benchmarks.

Participation & Engagement: Key Indicators and How to Move the Needle

Driving up 401(k) participation in mid-sized companies requires deliberate plan design and ongoing support. Here’s how to take action:

1. Implement Automatic Enrollment: Industry trends show that adding automatic enrollment is one of the most effective ways to boost participation. Although direct, named statistics for mid-sized employers are limited, broader studies confirm this intervention consistently raises engagement.

2. Offer Employer Matching: Even modest matching contributions can have a positive impact on participation and deferral rates, encouraging employees to save more.

3. Educate and Simplify: Provide clear education around investment options, plan benefits, and the impact of fees. Streamline the enrollment process and offer user-friendly digital access.

4. Monitor and Adjust: Regularly review participation data, deferral rates, and employee feedback to identify opportunities for improvement.

When employees don’t understand plan benefits or fee structures, participation rates and savings behavior often lag.

Monitor enrollment and watch for plan leakage from early withdrawals, which can undermine long-term savings for both employees and employers.

Balancing employer and participant fees is also crucial; for more, see Participant Fees vs Employer Fees: Getting the Balance Right.

Who Owns What and When: Operationalizing Benchmark Reviews

Accountability and cadence are key to maintaining plan health. Assign clear owners for quarterly or annual reviews—typically a cross-functional team of HR, Finance, and plan advisors.

Regular benchmarking and documentation aren’t just best practices; they’re your primary safeguard against compliance risks.

Thorough documentation and a clear SOP are essential not just for best practices, but for audit readiness and demonstrating compliance.

By scheduling consistent review cycles and leveraging committee toolkits, you help your plan stay competitive, compliant, and responsive to employee needs.

For more on fee disclosure best practices, see A Practical Guide to 401(k) Fee Disclosures for Employers.

Turning Metrics into Actions: When to Re-Bid, Redesign, or Communicate

Identifying a trigger event, such as a sudden fee spike, a drop in participation, or a compliance concern, should prompt a review of plan design or provider relationships. According to Abernathy Daley 401(k) Consultants, around 80% of companies with 100+ employees overpay on administration fees, which frequently leads to a new RFP or provider switch (hrdive.com).

Pay attention to employee feedback or complaints—these are often the earliest signals that your plan isn’t meeting participant needs.

The bottom line: When benchmarks flag a problem, act decisively, whether by redesigning the plan, initiating a competitive bid, or ramping up employee communications.

For more on evaluating 401(k) providers, see our guide on How Mid-Market Employers Evaluate 401(k) Plan Providers.

SOP Appendix: Templates, Logging, and Distribution

Visual clarity streamlines compliance.

• Templates & Logging: Maintain a simple benchmarking log, documenting each review, findings, and resulting actions.

• Distribution: Share review outcomes with your plan committee and relevant stakeholders.

• Audit Readiness: Store all documentation in a secure, central location for easy retrieval during audits or regulatory checks.

Update SOP templates and logs regularly to reflect changes in regulations or internal processes.

Every process step is easier with practical tools; download our comparison worksheet for a ready-to-use review template.

References

J.P. Morgan. (2024). 401(k) Plan Benchmarking: A Strategic Tool for Talent Retention. https://www.jpmorgan.com/insights/retirement/401k-plan-benchmarking-a-strategic-tool-for-talent-retention

401(k) Specialist Magazine. (2024). Fees for Large and Small 401(k) Plans Continue to Fall. https://401kspecialistmag.com/fees-for-large-and-small-401k-plans-continue-to-fall/

HR Dive. (2024). Midsize to Large Employers Overpay Retirement Plan Fees. https://www.hrdive.com/news/midsize-to-large-employers-overpay-retirement-plan-fees/731484/

U.S. Department of Labor. (n.d.). A Look At 401(k) Plan Fees. https://www.dol.gov/node/63354

NAPA-Net. (2023). 401(k) Costs Coming Down; Small Plans Still Twice as Expensive. https://www.napa-net.org/news/2023/5/401k-costs-coming-down-small-plans-still-twice-expensive/

Vanguard. (2025). Mitigating 401(k) leakage with emergency savings. https://institutional.vanguard.com/insights-and-research/perspective/mitigating-401k-leakage-with-emergency-savings.html