Innovative Firms

Cerity Partners

Cerity Partners offers a Plan Health Smartcard as a scorecard to measure how well a retirement plan sponsor is acting to drive better participant outcomes, while adhering to fiduciary duties. The diagnostic tool quantifies five dimensions: plan design, fiduciary governance, investments, vendor management and retirement readiness, all of which are rated and rolled up in a single score.

The benchmark helps plan sponsors identify the strengths, weaknesses and opportunities for improvement in their plan. The scorecard leverages best practices from both behavioral and traditional finance, such as streamlined investment menus designed to avoid an overwhelming number of choices. It asks, are you monitoring service providers regularly? When did you last perform an RFP? Do you understand the fee schedule? Do you work with an adviser?

“We revisit similar questions each year, holding plan sponsors’ and committees’ feet to the fire,” said Ty Parrish, practice leader of retirement plan services. “Scoring with data and quantifying results with a number holds everyone accountable.”

Although some may resist at first, ultimately plan sponsors are motivated to raise their scores. Over time many come around and actively pull levers to move the needle.

– Vanessa Drucker