DALBAR Rates Defined Contribution Plan Sponsor Web Sites

Web Sites Fail to Address DC Plan Sponsors� Concerns Over Meeting Fiduciary Obligations and Duties

(Boston, MA. January, 2004) – DALBAR released the results of its industry-wide evaluation of the Web support provided to defined contribution plan sponsors. The study found that Web sites, industry-wide, could do more to help ease the anxiety plan sponsors face over meeting their fiduciary obligations. Retirement plan scandals and resulting lawsuits brought on by plan participants have significantly heightened sponsors� concerns over meeting their fiduciary obligations, yet Web support and guidance in this area is lacking. Specifically:

Very few sites (17%) are effective at presenting a complete overview of the plan sponsor�s duties, responsibilities and fiduciary obligations, coupled with specific steps and/or guidelines to follow that are written in plain English.

  • Only one-third of plan sponsor sites allow sponsors to conduct compliance tests online.
  • While all sites report investment returns for investment options, very few sites go above and beyond in assisting plan sponsors with meeting their fiduciary obligations in investment selection and monitoring.

Web Sites Excel in Meeting Sponsors� Administrative Needs

The strengths of plan sponsor Web sites today lie in their ability to support sponsors� needs in administering their plan. In particular, all Web sites allow the sponsor to easily manage and monitor activity at both the plan and participant account level. Specifically:

  • 100% of Web sites allow plan sponsors to view each participant�s account balance by contribution source and investment type.
  • 92% of Web sites allow plan sponsors to view a history of each participant�s account activity and requests.
  • 75% of Web sites allow the plan sponsor to update the participant�s profile online.
  • 100% of Web sites allow plan sponsors to run reports based on plan and participant data and activity.

DALBAR�s DC Plan Sponsor Web Site Benchmarks

Through this study, DALBAR benchmarked the performance, offerings, and best practices of plan sponsor Web sites across the defined contribution industry. DALBAR evaluated the leading DC plan sponsor Web sites in over 150 Web site features under the major categories of:

  • Plan Administration
  • Plan Participant Activity, Account Management, and Communication
  • Investment Selection and Monitoring
  • Compliance
  • Keeping the Plan Sponsor Informed
  • Training and Education
  • Site Administration Functions
  • Web Site Usability and Behavior-Centric Support

The evaluation of DC plan sponsor Web sites was conducted in November and December of 2003. The full report is available by contacting DALBAR at 617-723-6400 or at [email protected]

DALBAR, Inc., the nation�s leading financial-services market research firm, is committed to raising the standards of excellence in the financial-services industry. With offices in both the US and Canada,DALBAR develops standards for, and provides research, ratings, and rankings of intangible factors to the mutual fund, broker/dealer, discount brokerage, life insurance, and banking industries. They include investor behavior, customer satisfaction, service quality, communications, Internet services, and financial-professional ratings.