While ChatGPT has been getting most of the attention surrounding artificial intelligence lately, there’s another new AI tool out there that 401(k) plan advisors may find much more useful in their day jobs.
That tool—released in late November 2022—is called BenchMine, billed as the first-ever 401(k) comparative analysis tool that’s free and open to the public.
Plan advisors (and anyone else for that matter) can search through more than 56,000 plans with at least $1 million in total assets nationwide to see how particular company 401(k) plans stack up in their city, region, against a competitor or within a specific industry—and show them exactly where the plan excels and/or falls short in terms of average fees, contributions, performance, etc.
And like ChatGPT, it can provide the information in clear English sentences.
BenchMine, a comparative analytics engine powered by OnlyBoth’s AI innovations, draws on Department of Labor 401(k) data from companies that filed a Form 5500 Schedule H for calendar year (CY) 2021, transforming a complex dataset into easy-to-understand comparisons of each plan’s costs, performance, and other key characteristics. The tool will be updated with DOL 401(k) data for CY 2022 once that data is made available later this year.
“Anyone can download the DOL’s 401(k) data, but few could understand it without expert analysis.”
Raul Valdes-Perez
BenchMine was previously made available to Defined Contribution Institutional Investment Association (DCIIA) and Plan Sponsor Institute (PSI) members. But as of last November, Raul Valdes-Perez, co-founder and CEO of Pittsburgh-based OnlyBoth, made the search and analysis of 401(k) data free and open for everyone, as a resource for plan sponsors, providers, participants, and all stakeholders to deepen their understanding of the options and opportunities at every level of the 401(k) industry.
“Anyone can download the DOL’s 401(k) data, but few could understand it without expert analysis,” Valdes-Perez said in a November 2022 press release announcing BenchMine’s newly widespread availability. “Let’s show how plans perform compared to peers. Enhanced transparency will bring change and expanded options to the 401(k)s that serve America’s tens of millions of employees.”
Average account balances (and much more)
As an example, BenchMine provided 401(k) Specialist with a ranking of the top $1B+ 401(k) plans based on average account balance.
Take a look at that page and you’ll see that the Lenexa, Kan.-based Performance Contracting Group, Inc. ESOP/401(k) plan has the highest average account balance among 986 plans ranked, with an average account balance of $1,213,783.40. It also shows you that the plan—based on the 2021 data—had total assets of $1,726,000,000 and 1,172 active participants.
It will also tell you the plan has the highest average employer cash contribution per active participant ($17,785) of all the 71 plans in the Plains region (IA, KS, MN, MO, NE, ND, SD) plans. That $17,785 compares to an average of $5,045 across those plans.
It also has the fourth-lowest total administrative expense ratio (0.004%), which compares to an average of 0.055% across those 71 plans, and incurs the fifth-lowest total administrative expenses ($64,951) compared to an average of $1,639,340 across the 71 plans.
This is only a fraction of the information available about the plan.
A quick scan down that original ranking of the top $1B+ 401(k) plans based on average account balance will also show you that as far as professions go, commercial airline pilots tend to be strong retirement savers, with United, Delta, American, and Alaska airlines all cracking the top 20—not to mention plans for Federal Express Corporation Pilots and NetJets Aviation, Inc.
4 engines generate targeted insights
After exploring the included plans computationally “for days,” according to the release, four different analytics engines can then generate targeted insights:
- The Benchmarking Engine reveals how a plan performs in its asset class, industry, geography, or other characteristics.
- The Comparison Engine provides a side-by-side look at the characteristics and qualities of up to 10 plans.
- The Scoring Engine scores a plan based on the discovered benchmarking insights, which then enables a ranking.
- The Discovery Engine lets users do simple data lookups, but also access with richly diverse queries the hundreds of thousands of stored insights.
BenchMine creates and stores benchmarking insights in perfect English, enriched with links to related plans and supporting context.
“People educate, motivate, and persuade best with language, as everyday life shows,” Valdes-Perez said. “Automation has been the obstacle, now overcome.”
In a recent blog post, Valdes-Perez said BenchMine is now equipped with good measures for both administrative expenses and investment returns, all in the service of enabling fair comparison, heightening performance transparency, helping to drive improvement, and empowering participant choices.
SEE ALSO:
• Top 401k Plans Ranked by Industry
• 401(k) Balances Dropped 20% in 2022 at Fidelity, But Increased in Q4