401K Providers: 2020 Top 10 Lists - Runnymede Capital Management (2024)

Companies that offer employees a 401(k) plan have many choices when selecting service providers for defined contribution plans. The challenge for many businesses, especially those small- and medium-sized, is that day-to-day operations leaves little time to review, monitor, and optimize their retirement plan on a regular basis. The result is that many plan sponsors lack a comprehensive understanding of who the top 401k providers are. Because your plan assets change due to financial market conditions and retirement plan contributions, it's important for plan sponsors to understand the service provider landscape and ensure that their plan is with the best provider for their participants (employees.)

PLANSPONSOR magazine conducts an annual recordkeeping survey and in 2020 compiled self-reported data submitted by recordkeepers of defined contribution (DC) plans that represent more than $8.2 trillion in assets. It is estimated to account for 90% of the total DC market.

Here's their list of the 2020 top 401(k) providers and followed by my thoughts.


Top 10, by Total 401(k) Assets ($MM)
1Fidelity Investments$2,037,733
2Empower Retirement$493,577
3The Vanguard Group$454,223
4Alight Solutions$434,737
5Principal Financial Group$322,976
6Voya Financial$211,389
7T. Rowe Price$195,224
8Prudential Financial, Inc.$180,544
9Bank of America Corporation$173,412
10Charles Schwab$162,876

source: 2020 PLANSPONSOR Recordkeeping Survey

By Total Defined Contribution Plans
1Paychex, Inc.17,693
2ADP Retirement Services9,112
3American Funds6,986
5John Hanco*ck5,662
6Empower Retirement4,399
8Principal Financial Group4,017
9Transamerica Retirement Solutions1,830

source: 2020 PLANSPONSOR Recordkeeping Survey

Impact of the Pandemic

The pandemic has caused massive dislocation among small businesses, even after the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Impacts were significant across industries like retail, arts and entertainment, personal services, food services, and hospitality. In contrast, technology, finance, professional services, and real estate-related businesses experienced less disruption.

The CARES Act created a new emergency retirement plan distribution option dubbed the coronavirus-related distribution, or CRD for short. A CRD may be drawn from a DC plan or from an IRA in any amount up to $100,000. Additionally, the law doubled the size of the loan a participant may take, from $50,000 or 50% of one's account balance, whichever is lower, to $100,000 or 100% of one's account balance.

Working with Recordkeepers

Plan Sponsors adopting CARES Act provisions have been working with their recordkeepers to amend their plan documents. Recordkeepers have also been busy fielding participant questions with regard to loans, in-service withdrawals, COVID-19 related withdrawals, and the consequences of each. Call centers have also experienced increased demand in fielding participants' questions about market volatility. Many sponsors have checked on their recordkeepers' business continuity plan to ensure that its services are operating smoothly during these unusual times.

No One-Size-Fits-All

As always, recordkeeping 401(k) providers can vary significantly in that some deliver more services while others promise less cost. Case in point, Paychex is the top 401k provider in the country based on number of plans. However, Paychex does not make the top 10 list based on assets ($.) How can this be? The reason is that Paychex shines as a provider for start-up and smaller plans, i.e. plans with smaller assets and/or fewer participants. Like most things in life, there is no one-size-fits-all solution that is best for everyone. Therefore, plan sponsors need to maintain a process for evaluating their changing needs and proactively engaging the best service providers to meet those needs.

Your Needs Are a Moving Target

Don't ignore your 401(k) plan and allow it to become stagnant. Even if your plan is set up perfectly today, it's not likely that it will be perfect 5 years from now. Plan assets grow and the number of participants change. Therefore, it is a best practice to review your plan regularly to see if plan design changes can be implemented to benefit participants and make sure that your costs are reasonable. Further, you need to keep up on regulatory changes to keep your plan compliant. If your company's needs have changed dramatically, it could call for a complete change in 401(k) providers.

We Can Help

The process of reviewing your plan does not have to be difficult or time-consuming. Whether you are trying to improve an existing plan or setup a new one, consider watching our 30-minute webinar where we discuss common 401(k) mistakes to avoid and ways to optimize your retirement plan. We want to help ensure that you are working with the best 401(k) service providers for your company and its employees.

Researching 401(k) Service Providers? Don't miss reading this article…

3 Tips for Choosing the Best 401(k) Providers

401K Providers: 2020 Top 10 Lists - Runnymede Capital Management (1)

When was the last time you reviewed your plan and evaluated your service providers?

401K Providers: 2020 Top 10 Lists - Runnymede Capital Management (2024)
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