Judy Diamond Associate’s Plan Score is a comparative aid found in our Retirement Plan Prospector database, compiled from the US Department of Labor’s Form 5500 disclosure document. Plan Score is calculated using a combination of quantitative statistical analysis and proprietary algorithms which examine each individual 5500 in the context of the entire population of all 5500’s. Only Defined Contribution plans are considered in this analysis, limiting the universe of filers to approximately 550,000 individual filings. Additionally, only plans for a similar fiscal year are considered in a grouping together – a 2019 filing will be compared only to other 2019 filings.
Plan Score is designed to allow users of our tool to meaningfully compare one plan to another plan. It can also compare one plan to a benchmark score tabulated from all plans in a certain region, industry, or size grouping.
Each Plan Score comes with a Plan Scorecard (see inset, below). The Plan Scorecard shows the 7 metrics of performance that Judy Diamond measures. Because the goal is to allow for comparison, the “rank” column shows how an individual metric compares against all other plans in the dataset. For example, a rank of “79” means that this plan outperforms 79% of all other DC plans on that particular metric. The Plan Scorecard is a completely data-driven and objective view of each of these rankings.
The only portion of Plan Score calculation that is subjective is in the relative importance of each of the 7 metrics. For example, outstanding participant loans is a much less important indicator of overall plan health than employee contributions or participation rate, and is thus afforded less weight in the final plan score calculation. The exact weightings are a trade-secret.
