The Value of Benchmarking
Benchmarking: A Powerful Tool for Building Better Plans
Benchmarking measures DC plans against their peers to help plan sponsors understand how well they are meeting the needs of their participants. It is increasingly recognized as one of the most powerful tools for optimizing a DC plan.
It's not just about measuring fees and avoiding litigation—benchmarking can help plan sponsors understand the value they're receiving. Successful benchmarking is:
- Objective: Plans are compared in terms of participant demographics, fees paid and plan design metrics, so that analysis is based on real data, not opinions.
- Comprehensive: Benchmarking examines every aspect of plan, from fees paid to participant success measures.
- Actionable: Benchmarking develops a framework for understanding and applying best practices, as well as identifying areas where value received from providers may be improved.
Finding the right approach
Benchmarking can be pursued in a number of ways, including research into Form 5500s collected by the Department of Labor or through an objective benchmarking service. To learn more about the best way to approach benchmarking for your plan, read The Case for Benchmarking or reach out to your BlackRock DC representative.