How to Identify the Gaps in Your Firm's 401(k) Plan
Most business owners understand the importance of setting up a 401(k) plan. It’s a way to take care of your employees and support their future, not to mention a strong retention tool.
At least that’s the theory. But the fact of the matter is that too many business owners simply set up the retirement plan and then forget about it. It’s usually not an intentional decision, but something that slowly happens over time. Executives have plenty of other pressing concerns to worry about, and their expertise isn’t in managing a retirement plan. But when retirement plans sit for years unexamined and unreviewed, cracks start to emerge, which can harm employees, cost the business money, and turn what should be an asset into a liability.
The good news is that most of these gaps are easy to spot once you know where to look.
Start with the fees, but don't stop there
Fees get most of the attention when people talk about 401(k) plans, and for good reason — they're often the easiest place for costs to creep up unnoticed. I often encounter business owners who started a 401(k) plan when their firm was small and growing. That plan might have been priced right for a small firm, but if the business has matured and the 401(k) has stayed the same, there’s a strong chance that the costs aren’t delivering the level of quality that a larger, more complex business demands.
If no one has done a real analysis of your plan's fees recently — not just a glance at the expense ratios, but a genuine review of what you're paying versus what similar plans of your size are paying — you’re likely leaving money on the table.
But fees are only part of the story. A plan can be priced competitively and still be failing the people it's supposed to serve.
Look at participation, not just performance
A strong fund lineup doesn't mean anything if your employees aren't using the plan. Low participation and low deferral rates are some of the clearest signs that a plan has a communication problem, not an investment problem. If your team's engagement stops at an enrollment email during onboarding, you likely have employees who don't know what they can do within the plan, whether they should choose Roth or pre-tax contributions, or how much they're on track to have when they retire.
Plenty of 401(k) plan consultants like to talk about their low fees. They’ll talk less about the actual service level they deliver. Why? Because real engagement takes more than a one-time meeting. It means sitting down with employees at least twice a year, in person when possible, to walk through what's happening with the plan and answer questions in plain language. It also means being available for one-on-one conversations — not just for the executives, but for every employee, whether they have $500,000 saved or $50,000. That’s how we approach 401(k) plan management at Meridian Wealth. The way we see it, if you’re paying for a 401(k) plan, then you deserve genuine service, not just a hands-off menu of investments.
Analyze support for executives and team leaders
One of the other issues that commonly arises with generic 401(k) plans is that they’re one-size-fits-all. Every employee gets the same treatment — or lack thereof.
That’s a major missed opportunity, because different employees may have different needs and require different levels of support. The best 401(k) plans offer deeper financial planning support for key executives and the business owners, helping to strategize around the business’ legacy, succession planning, and beyond.
Shifting the focus to outcomes
What is a retirement plan actually for? It may seem like an obvious question, but you’d be surprised how many 401(k) plans don’t seem to know the answer.
The purpose of the 401(k) plan is to help plan participants achieve their long-term goals. Yes, that means saving enough for retirement, but it also requires an understanding of what exactly their future will look like, the life they want to live, and the priorities they want to fund.
In short, it requires planning. A 401(k) can’t just offer a stream of returns that accrue in an account. That may lead to investment success, but it won’t lead to a successful retirement. The best plans focus on actual outcomes for the people in the plan, not just the accounts.
The importance of a 401(k) that fills the gaps
The gaps in a 401(k) often accumulate slowly over time. That’s exactly what makes them difficult to identify at first. None of these gaps is an emergency, but that doesn’t mean they don’t come with real costs. Unnecessary fees and disengaged, underserved employees can each affect your business.
At Meridian Wealth, our approach to 401(k) planning is to fill these gaps. We don't lead with cost and performance alone — we lead with whether your plan is producing successful outcomes for the people in it. That means regular oversight, direct access to a team that will sit down with your employees and get to know their goals, and a genuine look at whether your plan design still matches the business you're running today.