Benchmarking is a process where you compare your plan rates and investments to other investors working with similarly structured portfolios.
There are three main categories a financial advisor will assess when benchmarking your 401k plans:
3. Recordkeeping Services
These three areas are compared to the averages of similarly structured portfolios to determine whether a change in financial strategy is needed. The results of these findings are then documented, showing the process, and any needed updates, took place.
1. PLAN DESIGN
2. FUNDS AND FEES
3. RECORDKEEPING SERVICES
It is your responsibility as a fiduciary to carry out these assessments, document them, and have them available for review.
If the portfolios in your care experience loss due to a breach of these fiduciary responsibilities, you could find yourself personally liable for the mistakes. This could result in you being personally responsible to reimburse lost earnings.