Diversified Paper Examines Evolution of DB Technology

The white paper, “Outsourced Defined Benefit Plan Administration: Instant Efficiencies through Effective Technology,” identifies four generations of technological evolution, compares each generation and provides DB plan sponsors with the analysis and insight to make an informed decision for their organization and their employees.

The four generations of technological evolution include:

•  Generation 1, or G1, is the least advanced of the four models, relying more on human effort than advanced technology. Data is stored in worksheets, flat data files or even paper. As such, the plan sponsor has a person or group of people on staff who receive paper election forms which then must be manually entered into a spreadsheet to calculate benefit estimates.


•  G2 has more technological advancements than its G1 counterpart. The plan sponsor hires an outside benefits administration vendor to build a calculation program at a significant cost. The program does provide greater convenience for the sponsor, but the organization’s HR staff still manages data collection and participant inquiries.  


•  G3 is centered on outsourcing the majority of the plan’s administration. Here, sponsors team with an organization that provides “bundled services,” an arrangement that includes benefits administration, investment management and actuarial services.


•  G4, the most advanced option available today, provides an assortment of technology features that can help the plan sponsor save money, offer better participant service and achieve greater fiduciary effectiveness. This option provides data warehousing, payroll feed-based administration, real-time processing of benefit calculations, and integrates updates, such as regulatory changes, in real time and seamlessly.



To request a copy of the white paper, e-mail RetirementResearchCouncil@divinvest.com.