Betterment at Work Participation & Contribution Benchmark Tool Disclosure

The Participation & Contribution Benchmark Tool (“Benchmarking tool”) is a product feature offered by Betterment at Work that evaluates your 401(k) plan (“Plan”) metrics, against national averages based on your Plan size, as sourced from the Vanguard How America Saves Report. Based on the Vanguard Report and certain Plan data (described below), the tool classifies each plan into one of fifteen classifications and provides an AI-generated summary with information about your Plan’s overall engagement (based on your Plan’s participation rates and contribution rates). This tool does not and should not be considered to provide recommendations on your Plan design or other ERISA fiduciary recommendations. All output is informational and educational in nature.

The Benchmarking tool uses the following plan-level data points from your Plan, in addition to the Plan’s number of eligible participants, to select a benchmarking tier that applies to your Plan (a “Benchmarking Data Point”): (1) Participation rate—the percentage of eligible employees who are actively enrolled in the Plan and making contributions; and (2) Average contribution rate—the average deferral rate (as a percentage of compensation) across all your Plan’s actively contributing participants.

These data points for your Plan’s engagement are scored along five fixed thresholds: “Low,” “Mid,” “High,” “Expert Recommended,” and “Above Expert Recommended.” The two scores are then combined to categorize your Plan into one cell of a 3 x 5 matrix with fifteen possible options (below). The classification is then processed by a large language model (LLM) that generates an AI summary distilling how your Plan participation and contribution engagement relative to national averages. In addition, depending on your Plan’s categorization, the summary may be accompanied by a pre-populated link to additional Betterment educational materials relevant to your Plan’s classification.

Plan data is anonymized and used by the Benchmarking tool to generate an output based on your Plan data at the actual time you use the tool. The participation and contribution rates reflect the rates shown by your Plan at that moment in time, and are recalculated each time you use the tool. Results should be viewed only as an example of your Plan’s engagement at that time, and not as a continuous or predictive measure of your Plan’s engagement.

Please note that there can be a lag in the benchmarks reflected in the Benchmarking tool, based on the frequency of updates to the Vanguard How America Saves Report. Betterment cannot confirm how or when the Vanguard How America Saves Report is updated, and while it will seek to only use the latest such report available, information may become outdated and Betterment may choose to discontinue the Benchmark tool feature at its discretion. The participation and contribution thresholds of the Report are fixed; that is, they are not dynamically benchmarked to your Plan's industry, workforce demographics, or plan age. If your Plan is in a specialized industry or has an atypical workforce profile, it may be classified in a way that does not fully reflect your Plan’s engagement relative to the national average.

The Benchmarking tool provides informational benchmarking and educational content only. It does not constitute financial advice, investment advice, or plan design consulting. Plan sponsors should consult a qualified retirement plan advisor before making changes to plan structure or design.