What is the Plan Health Overview?

This report gives you a clear picture of how your 401(k) plan is performing. It shows how many employees are saving for retirement, how much they're contributing, and whether the plan meets all IRS requirements. Think of it as a check-up for your retirement plan — the numbers here help you understand if your plan is healthy and working the way it should for everyone in your company.

Participation rate measures what percentage of eligible employees are actively saving in the plan. A healthy plan typically has participation above 75%. The average deferral rate shows how much of their paycheck employees are setting aside — financial advisors generally recommend saving at least 10-15% of income for retirement.

The demographics of your workforce affect plan design and compliance. Employees age 50 and older can make extra "catch-up" contributions beyond the standard limit. Under SECURE 2.0, employees aged 60-63 have an even higher catch-up limit. Terminated employees during the plan year are tracked separately for reporting purposes.

As a Safe Harbor plan, your company makes guaranteed contributions to employee accounts. These contributions serve a dual purpose: they help employees build retirement savings, and they exempt your plan from the most complex IRS nondiscrimination tests. The breakdown below shows each type of employer contribution made during the plan year.

The IRS divides employees into two groups for testing: Highly Compensated Employees (HCEs) — those who own more than 5% of the company or earned above a threshold ($155,000 for 2025 plan year) — and Non-Highly Compensated Employees (NHCEs), which is everyone else. Because you have a Safe Harbor plan, no actual testing is required, but this comparison is still valuable for understanding how your plan serves different employee groups.

The IRS requires every 401(k) plan to pass a series of annual tests to keep its tax-qualified status. If a plan fails these tests, the company could face penalties, be required to return contributions, or in the worst case, lose the plan's tax benefits entirely. Your Safe Harbor design automatically satisfies three of the most important tests — the rest are verified from your census data.

These metrics highlight notable contribution patterns in your plan. Employees "maxing out" are saving the most the IRS allows — a sign of strong retirement commitment. The coverage ratio compares how your lower-paid employees' benefits stack up against higher-paid employees, and must be at least 70% to satisfy IRS requirements.

Before any calculations are performed, every employee record goes through a multi-point validation process. This catches data entry errors, missing information, and potential compliance issues before your census data is submitted for annual testing.