Retirement Plan Value: Four Questions Every HR Leader Should Ask

Retirement Plan Value: Four Questions Every HR Leader Should Ask
October 12, 2026 6 mins

Retirement Plan Value: Four Questions Every HR Leader Should Ask

Retirement Plan Value: Four Questions Every HR Leader Should Ask

Retirement plans are a major workforce investment of time and resources. As benefits costs rise and plan decisions become more complex, HR and finance leaders need a simple way to assess both risk and value. Four questions can help HR and finance leaders evaluate these considerations.

Key Takeaways
  1. Governance drives value. Strong oversight and clear accountability help reduce risk and improve outcomes.
  2. Look beyond fees. Assess total costs, including employer contributions, internal resources and external consultants, and administrative effort.
  3. Stay future-ready. Periodically evaluate whether the plan’s governance, service-provider arrangements and structure remain aligned with organizational and participant needs.

Employee benefit plans are a significant investment employers make in their workforce. But understanding the return on that investment can be difficult. HR leaders are already balancing increasing healthcare costs and a rapidly evolving workforce. They need a simplified framework for understanding the risks and value of their organization’s 401(k) plan.

The Framework
Lens Key Question
Risk Are we acting in the best interest of participants?
Costs Are we getting value for what we spend?
Outcomes Are employees making progress toward retirement readiness?
Future Readiness Will the plan continue to meet tomorrow’s needs?

Lens 1: Risk

Are We Protecting the Organization and Participants?

Today's retirement plans face a broad set of challenges. Evolving regulations, recordkeeping errors, payroll discrepancies, vendor oversight issues and cybersecurity threats can all create risk. So can mergers, acquisitions and leadership changes. At the same time, sponsors are evaluating new plan features and investment approaches, including private market investments and lifetime income solutions.

The Key Focus: Governance

Strong governance often separates high-performing plans from those that struggle. Consider two employers with similar plan designs, investment menus and fees. One maintains defined committee responsibilities, regular fiduciary training and rigorous provider oversight. The other takes a less structured approach, without regular reviews, documented minutes or the qualified people on the committee.

Over time, those differences can create risk exposure and affect participant outcomes.

Robust retirement plan governance is part of broader enterprise risk management. Finance and HR leaders should periodically assess whether their governance structure is keeping pace with the complexity and fiduciary responsibilities of their plan.

Key questions include:

  • Are committee roles clearly defined?
  • Is provider performance reviewed and documented?
  • Are operational issues identified and escalated consistently?
  • Do fiduciaries receive ongoing education?
  • Is decision-making aligned with the purpose of the plan?

Lens 2: Costs

Are We Getting Value for What We Spend?

Every retirement plan has costs. The question is whether those costs are creating value. Many organizations focus on fees alone. While fees are important, they represent only part of the picture.

Direct costs may include:

  • Employer matching contributions
  • Profit-sharing contributions
  • Investment fees
  • Administrative expenses
  • Advisory fees
  • Audit and legal costs

Less visible costs – time, resources and increased risk – are just as significant. Especially when HR leaders are already under budgetary pressures from rising benefits costs.

The Key Focus: Time and Resource Costs

Compliance oversight requires capable resources. Vendor management, operational corrections and participant service issues all contribute to the total cost of running a plan.

At the same time, employers face pressure across their entire benefits portfolio, not to mention the pressures of running a business and organization. Rising health care costs are forcing difficult decisions about where to invest limited resources. That makes it increasingly important to evaluate retirement spending through the lens of value rather than cost alone.

Questions worth asking include:

  • Are we receiving an appropriate level of services from our providers?
  • Are fees competitive relative to similar plans?
  • Are internal resources being used efficiently?
  • Can the plan adapt as the workforce evolves?
  • Does plan spending support broader business and talent objectives, rather than simply checking a box?

The most effective plans are not necessarily the lowest-cost plans. They’re the plans that deliver meaningful value for the investment being made.

Lens 3: Outcomes

Are Employees Making Progress Toward Retirement Readiness?

Ultimately, the purpose of a retirement plan is to help employees prepare for retirement. A plan can have competitive fees and strong governance yet still fall short if employees are not participating, saving or investing effectively.

The Key Focus: Look beyond plan features and focus on results.

Consider metrics such as:

  • Participation rates
  • Deferral rates
  • Employer contribution utilization
  • Asset allocation patterns
  • The number of loans and hardship withdrawals
  • Retirement readiness measures

Taken together and interpreted in context, these indicators can help employers assess participant engagement and progress toward stated plan objectives. Employees have diverse financial wellbeing needs, with each generation placing value on different aspects of financial security, support and retirement planning.

Employers should evaluate their retirement program within the broader context of total rewards. Questions include:

  • Does the plan remain competitive in the marketplace?
  • Does it meet employee expectations?
  • Are employees taking full advantage of available benefits?
  • Does the plan support workforce goals, and provide the opportunity for employees to “move on” when the time is otherwise right for them?

Organizations that measure outcomes gain a clearer understanding of whether their retirement investment is producing meaningful results.

Lens 4: Future Readiness

Will the Plan Continue to Meet Tomorrow's Needs?

The retirement landscape continues to evolve as regulatory requirements, workforce demographics and available plan features change. Future-ready organizations recognize that retirement plans cannot remain static.

The Key Focus: Build governance structures that can adapt to change.

Plan sponsors can strengthen their approach through:

  • Regular vendor/service provider reviews
  • Ongoing fiduciary education
  • Fee benchmarking
  • Enhanced operational controls
  • Strategic use of external expertise
  • Monitoring of participant outcomes

Many organizations are also exploring new operating models and plan structures. Pooled employer plans, or PEPs, are one example. For many employers, they provide access to specialized expertise, streamlined administration and reduced risk for employers. In addition, cost savings can further enable better retirement and business outcomes.

What matters most is that employers periodically evaluate whether their current structure remains aligned with their objectives, resources and risk tolerance. Future readiness is not about predicting what comes next. It is about building the flexibility and governance required to respond effectively when change occurs.

Focusing on What Matters Most

Retirement plan evaluation does not have to be overwhelming. By focusing on four questions, HR and finance leaders can gain a clearer view of both risk and ROI.

Risk: Are we protecting the organization and participants?

Costs: Are we getting value for what we spend?

Outcomes: Are employees making progress toward retirement readiness?

Future Readiness: Will the plan continue to meet tomorrow's needs?

The strongest retirement programs perform well across all four dimensions. They combine structured governance with disciplined cost management. They focus on participant outcomes. And they continuously adapt to changing business and workforce needs.

For employers facing tighter budgets and greater scrutiny, that combination may be the most important measure of retirement plan success.

The information contained in this article is intended to assist readers and is for general guidance only. It is not intended to address the specifics of any individual situation or provide legal, regulatory, financial, investment or other professional advice. Readers should consider the information in light of their own circumstances and consult appropriate professional advisers.

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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