By Mark Olsen, Managing Director at PlanPILOT
Consider a hypothetical retirement plan with a lineup any committee would be proud of. It offers low-cost index funds and a well-built target-date series, and its investment policy statement gets reviewed every year. It seems all is done well.
Now suppose a third of eligible employees never signed up. Every hour the committee spent perfecting that menu helped only the employees who walked through the door. Fiduciaries often spend countless hours vetting investment lineups, yet leave the biggest risk to retirement security—employee engagement—largely unmeasured.
Plan committees tend to spend their meeting time on what’s easy to see and document, like fund performance and fee benchmarking. At PlanPILOT, we believe oversight should also answer a more challenging question: Is the plan helping employees build retirement security? That means tracking deeper, but more important, results alongside obvious features.
What This Article Covers
- Why plan features are inputs, and employee results are the real measure of a plan
- The outcome metrics worth putting on every committee agenda
- How to find which groups of employees are being left behind
- Turning outcome data into documented fiduciary decisions
A Strong Menu Means Little if Employees Aren’t Using It
An investment menu is an input. So is the match formula, and the recordkeeper’s website. Each matters, but the first test of whether a plan is working is how many eligible employees are enrolled.
Vanguard’s How America Saves 2026 report found that participation reached 94% in plans that automatically enroll new hires, compared with 64% in plans where employees have to sign up on their own. A 30-point gap dwarfs the difference any single fund change could make. The same report shows 79% of Vanguard plans with at least 1,000 participants now use automatic enrollment, which means roughly one in five larger plans still asks employees to opt in.
Which Outcome Metrics Are Worth Tracking?
These figures tell a committee more about plan health than another page of performance tables, and your recordkeeper can produce each one.
First, take a look at participation and savings behaviors:
- Participation rate: Measure it against all eligible employees, including those who were auto-enrolled and later opted out.
- Savings rate: Track the average employee deferral and the total rate including employer contributions. Vanguard reports an average total savings rate of 12.1% across its plans in 2025, which gives you a useful benchmark.
- Match capture: What share of participants contribute enough to receive the full company match? Anyone below that line leaves a significant benefit on the table.
- Leakage: Loans, hardship withdrawals, and cash-outs at job change all drain retirement savings early. Vanguard found 6% of participants took a hardship withdrawal in 2025, up from 5% the year before.
Then have the recordkeeper provide data on these long-term trajectory measures:
- Retirement readiness: Many recordkeepers can project each participant’s retirement income as a share of current pay. The trend in that figure matters more than any single year’s reading.
- Investment behavior: Look at how many participants hold an age-appropriate allocation and how many sit entirely in cash or a single stock fund.
Dig Into the Numbers & Look Beyond the Averages
Plan-wide averages can hide serious gaps. A plan with 85% overall participation might have far lower enrollment among hourly workers, newer hires, or employees at one particular location. Asking the recordkeeper to break out results by age, pay level, tenure, and work site shows the committee where its efforts will do the most good.
It also keeps education spending honest. A generic enrollment meeting tends to reach the same engaged employees every year, while targeted outreach paired with a design change such as automatic increases can move a lagging group’s numbers.
Turn Measurement Into Fiduciary Evidence
While ERISA doesn’t mandate a specific savings rate, demonstrating that the committee actively monitors and addresses workforce outcomes builds an exceptionally robust, defensible fiduciary record.
We recommend writing outcome goals into the committee charter or a plan governance document, with a target for each metric and a date to review it. When results fall short, the minutes should show what the committee considered and what it decided.
That might be adding automatic enrollment for existing employees, restructuring the match to reward higher saving, or changing loan rules. Over a few years, that record shows a committee steadily managing toward achieving meaningful results.
Summary
A well-built investment lineup is worth the effort, but it only helps the employees who are in the plan and saving enough to benefit. Strong retirement plan management puts participation, savings rates, leakage, and readiness on the same agenda as fund performance, and it looks at those results by employee group. Committees that measure outcomes, set targets, and document their responses serve employees better and build a more defensible fiduciary record.
Action Steps to Take
- Request participation, deferral, match capture, and leakage reports from your recordkeeper before your next committee meeting.
- Ask for those results broken out by age, pay level, tenure, and location.
- Set a written target for each metric and add an annual outcomes review to the committee calendar.
- If the plan doesn’t automatically enroll new hires, study what adding it would cost and what it would do for participation.
- Document every outcome-related decision in the committee minutes, including changes you considered and declined.
Is Your Plan Working for Your Employees?
Independent and impartial by design, PlanPILOT applies its expertise to each facet of plan development, governance, and implementation, with objective guidance tailored to your organization’s goals.
If you’d like a fresh look at how your plan is serving your employees, reach out to me at (312) 973-4913 or send an email to mark.olsen@PlanPILOT.com. We’d be glad to talk through what your numbers are (or should be) telling you.
About Mark
Mark Olsen is the managing director at PlanPILOT, an independent retirement plan consulting firm headquartered in Chicago. PlanPILOT delivers comprehensive retirement plan advisory services to 401(k), 403(b), and 457 plan sponsors. His specialties include plan governance, investment searches, investment monitoring, and plan oversight. Mark is recognized as a leader in the industry and speaks at national conferences, including those organized by Pensions & Investments, and CUPA-HR.