Poor plan design results in delayed retirement, as well as employee turnover. Those costs can be significant over time, as replacing an employee can cost 1.5 to 2 times the employee’s salary.

Studies show that for every worker who delays retirement because they’re not financially prepared, it costs the employer an additional $50,000 per year due to increased healthcare expenses, lower productivity and higher salaries.¹ If just 15 workers delay retirement for three years at a company with 500 employees, it will cost the organization an estimated $2.25 million.

Optimizing your plan design can enhance employee satisfaction and lead to higher retention rates, increased plan participation, and fewer delayed retirements. These amount to greater savings for your organization.

Regular reviews allow you to identify any potential issues early on. The U.S. Department of Labor (DOL) suggests employers conduct a periodic review of their retirement plan, including a formal benchmarking process, at least once every three to five years to ensure that the plan continues to operate in the best interest of its participants.

Benchmarking Is Key to Achieving Plan Goals

USI Consulting Group (USICG) uses proprietary analytics in our Plan Design Benchmarking Study services, comparing your retirement plan against others in your industry, geographic location, and other areas. USICG’s benchmarking process combines information from more than 4,000 retirement plans with industry-specific data and third-party comparative data to generate a robust comparison.

Through the benchmarking process, USICG’s plan design experts review and analyze an extensive number of data points from a client’s plan, then make recommendations. Pros and cons are listed, along with relative costs, to help clients understand the plan design options. USICG guides organizations to implement features to improve employee participation, pricing, technology, investments and services.

Case Study: Benchmarking Increases Plan Participation by 34%

A USICG client with 600 employees and limited HR staff used USICG’s benchmarking expertise to increase plan participation, which was hovering around 64%. USICG conducted a benchmarking study and recommended implementing automatic enrollment at 3% of salary for employees not participating in the plan, as well as adding an automatic contribution escalation option for those participating. Unless the employees opted out, they would be on the path to retirement.

After this plan design change, the organization had a 34% jump in participation, with 98% of the workforce enrolled in the plan.³