Participants Get Personal ROR From Diversified

September 27, 2000 ( - Diversified Investment Advisors has added a personalized rate of return to all quarterly participant statements for its defined contribution plan clients, including 403(b)s, 401(k)s and 457 plans.

The calculation is “dollar-weighted” to allow for the actual length of time the money was invested, rather than the more simplistic calculations used by some providers in offering a participant return.

With some providers, the rate of return calculation is determined by taking the quarterly earnings divided by the sum of the participant’s beginning balance plus one-half contributions allocated during the period.

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Diversified notes that financial professionals typically use the dollar-weighted method to determine investment portfolio performance.

The statements will provide a personalized rate of return for:

  • Year to date activity and
  • The latest 12-month period through the statement date

The statement also shows a 50-year historical average rate of return for an investment strategy similar to the participant’s for comparison.

Purchase, New York-based Diversified Investment Advisors currently provides recordkeeping to some 600,000 participants.

– Nevin Adams