Data is the lifeblood of the retirement plan industry. A lot of it is collected from the participants throughout their lifetime. It is crucial to manage and use the data carefully. Per ERISA, participant data must be stored securely and used according to guidelines.

The retirement plan industry can significantly improve the service provided to the participants and sponsors by adopting data-driven methods. In particular, data can help to identify which processes need improvement and the changes that could have the most significant impact.

Additionally, data can help track the performance of individual employees or teams over time, allowing for more effective performance management. Ultimately, data-driven continuous improvement can lead to higher participation and better participant outcomes. 

Data is crucial

Data impacts the retirement plan administration in more than one way. Plan sponsors can offer data-backed insights to help participants track their progress and make changes to their contributions. Retirement plan administrators can use data to ensure timely and proper plan management and compliance. The key benefits of data are:

  • Real-time insight: Accurate data allows for making critical decisions in time. Plan administrators can use dashboards and flexible reporting tools to ensure all IRS and DOL regulations are complied with proactively.
  • Track plan performance: Automated data management allows recordkeepers and plan administrators to track key attributes of the plan, like contribution ratios. They can review the plan sponsor’s portfolio and suggest improvements if required. It supports proactive measures to prevent penalties from regulatory bodies like DOL and IRS.
  • Automate customer services: Plan participants seek financial literacy and retirement planning awareness. Data helps virtual retirement coaches and Robo-advisors to understand participant profiles. These digital tools analyze historical data to suggest the best investment options and help participants make smart retirement plans while saving costs. Natural Language Processing (NLP) helps process participant information, including the intent to conduct sentiment analysis. The details are used to draft engaging communications like texts, emails, and even phone calls.
  • Personalization: Not only demand but retirement plan personalization is necessary to ensure specific needs of the plan participant are met. Retirement plan administration software uses artificial intelligence (AI) and machine learning (ML). These models need precise data to generate essential information. Plan sponsors and administrators use the insights to recommend favorable actions based on participant profiles. It helps generate greater value for all stakeholders.
  • Minimize errors: Retirement service providers rely on data to streamline backend operations by eliminating manual work. They use data to feed AI algorithms and ML models to reduce errors. Predictive and historical data analytics help in identifying discrepancies. Plan administrators can use these insights to take corrective measures on time. They can also use the data to fulfill fiduciary responsibilities and avoid unnecessary penalties.

Get the right data management tools

Gathering data is an important component of the scope of activities of retirement plan administrators and recordkeepers. But they must take care of the regulatory and data security responsibilities while handling them. Reliable retirement solutions and service providers like Congruent Solutions provide a retirement plan administration platform that ensures the strong privacy of your data.

AI and ML power our advanced tools to offer data analytics and cybersecurity. They seamlessly integrate with most enterprise-class solutions. The holistic platform has been prepared by experts with over 15 years of industry experience. They address all your record-keeping and data analytics needs. You get the most accurate data from a single source of truth and maintain transparency through data sharing across functions.

Contact our team today for your data management needs.

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