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Retirement Readiness
Run Your 401(k) Like You Run Your Business
Last Updated: September 22, 2025
A Framework for Closing the Retirement Readiness Gap
The retirement readiness crisis in America is undeniable: despite the widespread availability of 401(k) plans—the primary retirement savings vehicle for millions—too few workers are on track to retire with financial security.
Fiduciary committees, tasked with overseeing 401(k) plans, often aren’t equipped with the level of rigorous management needed to drive meaningful improvements in retirement outcomes. In too many organizations, the plan functions administratively but falls short of reliably helping employees retire with confidence.
To close the gap, employers must treat 401(k) oversight like a core business function—applying the same discipline, goal-setting, accountability, and measurable progress through key performance indicators (KPIs). This article outlines a practical framework for doing exactly that.
The Retirement Readiness Challenge in America
The evidence paints a stark picture. According to the Federal Reserve’s latest Report on the Economic Well-Being of U.S. Households, only 35% of Americans say their retirement savings are on track. In their 2022 Survey of Consumer Finances, 54% of U.S. households had no retirement-account savings, and the median retirement savings across all ages was just $87,000. For families aged 55–64, the median balance is around $185,000—far below what’s needed for a comfortable retirement (Federal Reserve, 2022).
The concern isn’t just low balances—it’s confidence. In 2024, a National Institute on Retirement Security survey found that 79% of Americans believe the country faces a retirement crisis (NIRS), and a record 64% fear outliving their money more than they fear death (Allianz Life).
Even with 401(k) plans widely accessible, 55% of working-age households face the risk of not maintaining their standard of living in retirement (NIRS). This is a systemic failure—and one that can be addressed through better plan management.
The Federal Reserve just released new data: only 35% of workers feel their retirement savings are on track. What does this say about the effectiveness of today’s 401(k) plans—and where do we go from here?
Fiduciary Committees and Their Oversight Role
Fiduciary committees are legally responsible for managing 401(k) plans in participants’ best interests. Their duties include selecting and monitoring investment options, managing plan fees, and staying compliant with ERISA regulations.
These are not check-the-box tasks. They are ongoing responsibilities that require active oversight. Yet, in our experience, many committees operate with minimal structure, infrequent reviews, and no clear performance objectives.
When oversight lacks rigor, the plan is often treated as an optional employee benefit rather than an essential financial tool. The result: missed opportunities to improve outcomes and an ongoing gap in employee retirement readiness.
Why Business Management Principles Matter for 401(k) Oversight
Effective management of any critical business function—be it sales, operations, or compliance—relies on three fundamental principles:
- 1. Set a Clear Goal: Define specific, measurable objectives that guide all activities.
- 2. Assign Responsibility: Designate a person or team accountable for achieving the goal.
- 3. Require Reporting of KPIs: Track progress through relevant metrics and report regularly to enable informed decision-making.
- When these principles are applied to 401(k) oversight, the plan transforms from a passive benefit into an actively managed driver of retirement readiness.
1. Set a Clear Goal
Business success depends on clarity. Sales teams have revenue targets; operations have efficiency benchmarks. Similarly, fiduciary committees should have a single, measurable objective for their 401(k): get employees on track for retirement.
While goals like increasing participation or boosting satisfaction scores have value, they don’t answer the most important question: Are employees on track to retire securely?
Declaring retirement readiness as the plan’s core goal shifts every decision toward that outcome.
2. Assign Responsibility
A goal without ownership is just wishful thinking. In many organizations, 401(k) oversight is spread across HR, finance, advisers, and recordkeepers, with no single leader ensuring all parts work together toward the end goal.
When responsibility is vague, accountability disappears. The solution: designate a “Retirement Readiness Manager” or equivalent role to coordinate efforts, enforce performance standards, and hold all partners (internal and external) accountable.
Advisers and service providers play a vital supporting role, but the fiduciary committee must make certain that someone owns the outcome and is evaluated based on real progress toward retirement readiness.
3. Track Progress by Reporting the Right KPIs
In business, you can’t improve what you don’t measure. Retirement plans are no exception. Tracking and reporting the right KPIs turns assumptions into evidence and provides a clear roadmap for action.
At Pension Consultants, Inc., we focus on three critical drivers of retirement readiness:
KPI
What It Measures
Why It Matters
Contribution Rates
Average employee savings rates relative to what’s needed to replace income in retirement
Increasing contribution rates is the most immediate lever to improve readiness
Investment Performance
Net-of-fee returns versus an all-index benchmark
Compares whether the plan investment lineup is adding value beyond passive alternatives
Fees
Total costs paid by the plan, including administrative and fund costs paid by participants
Excessive fees erode balances and reduce retirement security
KPI: Contribution Rates
What It Measures
Average employee savings rates relative to what’s needed to replace income in retirement
Why It Matters:
Increasing contribution rates is the most immediate lever to improve readiness
KPI: Investment Performance
What It Measures
Net-of-fee returns versus an all-index benchmark
Why It Matters
Compares whether the plan investment lineup is adding value beyond passive alternatives
KPI: Fees
What It Measures
Total costs paid by the plan, including administrative and fund costs paid by participants
Why It Matters:
Excessive fees erode balances and reduce retirement security
Quarterly reporting on these KPIs gives committees clear answers: Are we succeeding or falling behind? That clarity enables informed decisions on plan design, investments, and vendor management.
The Cost of Neglecting Discipline
Without rigorous goal-setting, accountability, and KPI tracking, 401(k) plans often suffer from:
● Low Contribution and Participation Rates: Employees miss out on matches and compound growth.
● Suboptimal Investment Choices: Poor oversight leads to underperforming or high-fee funds.
● Inadequate Participant Engagement: Generic education fails to drive meaningful action.
● Uncontrolled Costs: Excessive fees reduce overall retirement savings.
Each factor pushes employees further from retirement readiness — and represents a missed opportunity for fiduciaries to fulfill their duty.
In this 30-minute webinar, we explore how 401(k) fund changes can obscure poor performance. This webinar offers valuable insights into the traditional tactics used to report investment performance and how they may be concealing subpar results.
Shifting the Mindset: 401(k) Plans as Strategic Business Functions
Historically, many employers have viewed 401(k) plans as optional benefits—“take it if you want, leave it if you don’t.” This mindset has led to passive management and missed opportunities to improve outcomes. If retirement readiness is truly a priority, employers must elevate 401(k) oversight to the same level as other core business functions.
This means:
● Setting measurable retirement readiness goals aligned with workforce demographics and needs.
● Assigning clear responsibility to individuals empowered to act and held accountable.
● Establishing regular KPI reporting cycles to monitor progress and guide decision-making.
Practical Steps for Employers
#1
- Designate a Retirement Readiness Manager (Leader): Assign a dedicated role responsible for plan oversight and participant outcomes.
#2
- Implement Data-Driven Reviews: Use plan data to track contribution levels, investment lineup returns, and fees, and report findings regularly.
#3
- Enhance Participant Communication: Tailor education and engagement efforts to encourage higher savings and smarter investing.
#4
- Optimize Plan Design: Regularly assess investment menus and fee structures to ensure competitiveness and value.
#5
- Incorporate Automatic Features: Use automatic enrollment and escalation to boost participation and savings rates.
WHAT NOW?
This is the problem we’re focused on solving. The good news is that it can be solved!
If any of this resonates—if you’re nodding along or feeling the same frustrations—you’re not alone. And you’re not stuck.
Join us for our live webinar, ‘What’s Your Problem, 401(k)?’ We’ll unpack the root issues holding plans back in more detail and share practical, actionable steps employers can take to drive real retirement readiness for your employees
The retirement savings crisis in America demands a fundamental change in how 401(k) plans are managed. Lax oversight by fiduciary committees has allowed these plans to operate as optional benefits rather than essential financial tools.
By adopting proven business management principles — setting clear goals, assigning responsibility, and rigorously tracking KPIs — employers can transform their 401(k) plans into powerful engines for retirement readiness.
Paired with practical actions — dedicated management, data-driven reviews, optimized plan design, and targeted participant engagement — this disciplined approach actively supports employees’ ability to retire on time and with confidence. It not only helps to safeguard employees’ financial futures but can also strengthen organizational reputation and long-term economic stability.
Managing 401(k) plans like other critical business functions is no longer optional — it is essential.
