T. Rowe Price has launched a defined contribution plan service that uses participant data to help sponsors assess potential changes, such as introducing automatic enrollment. Company officials believe the new service, Plan Meter, will retain business by saving sponsors the cost of hiring third-party consultants, said Heidi Walsh, v.p. strategic marketing and business development. In addition, the offering helps sponsors meet their fiduciary obligations by providing a rationale for altering plans, she said. “It’s another tool to help you as a fiduciary because it provides empirical evidence,” Walsh said. “If a consultant was going to do something like this you could only imagine what the fee would be.” T. Rowe generates reports for sponsors without cost. T. Rowe can offer the plan because its in-house recordkeeping units already store participant information such as age, income, individual asset allocation, employee tenure and salary.
Crunching these numbers generates standard reports that address adding or changing autopilot services, catch-up contribution provisions, employer matches and default investments, Walsh said. Internal consultants have the flexibility to change variables for sponsors who are interested in tackling specific subjects.
Examining data on a plan-wide basis gives sponsors more perspective to analyze problems. For example, if data shows the average rank and file will not meet their retirement objectives until age 72 a sponsor may suggest increasing the company’s matching contribution. “If they know the only way people can save for retirement is by staying on but don’t want a bunch of 72-year-olds on the payroll they can go back and look at the employee match. It really juices the plan up,” Walsh said.