Benchmark Government Retirement Plans
Compare options to improve plan performance, protection, engagement, and fees
Government Retirement Plan Benchmark
A government retirement plan benchmark is an evaluation of how well or poorly a group retirement plan is performing for a government entity.
When a retirement plan is offered for a government entity, it should be benchmarked approximately every three years to closely examine its suitability for the organization.
What Does a Retirement Plan Benchmark Evaluate?
Benchmarking a retirement plan evaluates the plan's:
- Cost
- Health
- Performance
- Fiduciary protection
By comparing it to other similar plans, the benchmark will indicate how well or poorly the plan is doing.
A benchmark can help identify the strengths and weaknesses as well as show what implementations can improve the overall plan's health.
Types of Government Retirement Plans
Any type of retirement plan can be benchmarked. Government entities include:
- State government retirement plans
- Local government retirement plans such as municipalities, boroughs, and townships
- School district retirement plans
The typical plans benchmarked include:
Retirement Plan Benchmark Differentiators
Government employer-sponsored plans have different plan designs. As such, different types of plans will require variations in their benchmark analysis.
If the government plan is a defined-benefit plan, it will be slightly more difficult due to having different documentation requirements compared to defined contribution plans.
This is because defined-contribution plans do not need to comply with the Employee Retirement Income Security Act of 1974 (ERISA).
For a defined-benefit plan, there is no required annual reporting, which makes the benchmarking factors harder to find.
In some situations, an audit will be required and will be used in benchmarking to provide further insight.
Three Types of Retirement Plan Benchmark Reports
There are three main tools that Langan Financial Group uses to benchmark government retirement plans. These reports are essential and have their own role when benchmarking a retirement plan that includes:
- Fiduciary Investment Review
- Prism Benchmark Report
- Provider Analysis
Fiduciary Investment Report
The Fiduciary Investment Review provides a look into the strength of the investments being used in the plan and if there should be any replacements.
It leverages a scorecard system that ranks each fund on its performance quarterly and gives them a score out of ten.
Prism Benchmark Report
The Prism Report is used to assess the fees associated with a retirement plan. The report utilizes plan information such as total assets and total participants and load in a “universe” of plans within a similar size to properly compare the plan.
The Prism Report will break down the following fees:
- Advisory Fees
- Investment Fees
- Recordkeeping Fees
- TPA/Administration Fees
It will calculate the total fees paid into the plan and compare them to a low, average, and high-cost plan of similar size.
This will paint a picture of what other similar plans are paying to determine the reasonability of fees.
The report will show the breakdown per participant which is another way to measure how much the participants are paying.
Provider Analysis Report
The Provider Analysis is our bidding report that allows for other recordkeepers to make a bid on the retirement plan.
Approximately every three years a plan's advisor should at least reach out to other recordkeepers to see if they can receive lower fees by transferring the plan.
Recordkeepers will propose their services and fees for the plan when requested and the report will compare the fees and services of each proposal compared to the incumbent.
The report gives information about the companies that are bidding and visualizes the breakdown of fees which helps to point out differences between plans.
One important note is that the cheapest plan may not be the best when considering the fiduciary responsibility associated with it.
There is a reason why a plan may be the cheapest and that is because they are usually more hands-off when it comes to fiduciary responsibility.
Retirement Plan Benchmark Opportunities
During the start-up of a government retirement plan, fees may appear high, this is because there has not been record of annual contributions and assets are just getting started.
In addition to the higher recordkeeping fees, there are additional fees to initiate the plan. It is important to periodically review these fees once assets flow into the plan and build up.
As assets and contributions grow, it opens the opportunity to lower the fees. If the plan has not been benchmarked in the first three to five years there may be room for a sizable fee reduction.
This is done by the financial advisor on the plan by reaching out to the recordkeeping company and requesting a fee reduction.
This can be accompanied by other recordkeeper bids, showing what others would charge for the same plan. Doing this will keep the current provider competitive with other offers, ensuring the best price.
Free Retirement Plan Benchmark
If you are interested in having your retirement plan benchmarked or talking with a group retirement plan advisor about your plan's structure, We are here to listen!
Langan Financial Group uses a proprietary system to evaluate employer retirement plans. We will collaborate with you to help determine:
- Is your plan properly designed?
- Is your plan meeting your goals?
- Do you have proper fiduciary coverage?
- Is your plan performing to the best of its ability?
Retirement Plan Consultant Appointments
We strive to be the best financial government group retirement plan advisors possible. You can view our BrokerCheck to see our employment history, our zero regulatory issues, and zero arbitration issues.
In addition, you can view our over 75 - 5 star reviews on Google's reviews.
We are highly flexible with your schedule. While our standard hours are 8:00 am to 5:00 pm, we are available evenings and weekends by appointment to help cater to your schedule.
We can schedule appointments via:
- Phone
- Zoom
- In-person
So whatever your preference is and wherever you are, we will do our best to meet with you.
Schedule a Chat with a Retirement Plan Advisor
Give us a call at 717-288-1880 to see how our local financial advisors can support your retirement planning needs.
Or visit our retirement plan advisors contact page to fill out an inquiry and we will have one of our team members reach out to you!
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Disclosure: Check the background of your financial professional on FINRA's BrokerCheck. The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Cambridge and Langan Financial Group, LLC. are not affiliated. Cambridge Investment Research Advisors, Inc. a Registered Investment Advisor. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC, to residents of: AL, AZ, CO, DE, FL, GA, IA, KY, MD, NJ, NM, NY, NC, OH, PA, TX, VA, WI Cambridge and Langan Financial Group does not offer legal advice. Estate planning services are in regards to your overall financial plan. Always be sure to speak to a legal professional in regards to specific legal matters. Fixed insurance services offered through Langan Financial Group.
Testimonial/Endorsement Disclosure: The testimonials may not be representative of the experience of other customers. The testimonials are no guarantee of future performance or success. All of the testimonials/endorsements are clients with the exception of Steven Martinez of York SPCA. There was no cash nor non-cash compensation for any of the testimonials provided.
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Address: 1863 Center St, Camp Hill, Pa 17011
Phone: 717-288-1880
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Address: 3405 Board Rd, Suite 200, York, Pa 17406
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