Using artificial intelligence to scour, collect, process, and use Form 5500 data?
While most retirement plan firms and advisors are taking a wait-and-see approach to incorporating artificial intelligence (AI), one that aligns with the late adopter attitude for which they’re known, a few firms are racing ahead. 
In May, one such company, San Francisco-based Newfront Retirement Services, organized a hackathon, bringing together its engineers, developers, and related personnel to brainstorm new ideas (hacks) to improve efficiency and customer experiences.
“We asked, ‘What can we do?’” Greg Kaplan, the firm’s SVP and Practice Leader, said. “Especially since AI is eating the world and taking over. How do we leverage it in strategic ways for our business, which is very much centered around having human expertise in the loop—not replacing but empowering them to focus on strategic value-adds and figuring out how to leverage technology to get rid of the mundane, boring tactical stuff.’”
The hackathon resulted in roughly 20 project ideas, and seven were selected. Kaplan’s idea, plan benchmarking on steroids, was one.
“We have very detailed information in our book of business,” he explained. “We benchmark clients based on specific peer groups they give us. We generally tease that info from the 5500 and then add it to our database one at a time. It allows us to enrich the database by including 600,000-plus plans. The AI capabilities focus on the audit reports and pulling out unique plan provisions that are unavailable in just the 5500 CSV data exports.”
It’s pretty cool, something Newfront acknowledged with the project’s development code name—R.Ai.Ben (which stands for Retirement AI Benchmarking), a play on Ray-Ban sunglasses.
“We’re already really good, but I said, ‘Let’s prove we can take this to the next level. And in four days, it was born.”
As a wholly owned subsidiary of Newfront, which Kaplan describes as the world’s first “bionic, tech-enabled insurance broker,” it’s not your typical independent RIA and 401(k) advisor shop. It employs 60 engineers as well as insurance and retirement planning professionals, a roster of talent he claims “come from the unicorns who’ve created the companies that everybody talks about today.”
“On the retirement side, we’re pure-play defined contribution retirement plan consulting with no private wealth management. So, we’re hyper-focused on what we do and do that really well. We’re not trying to build the biggest; we’re trying to build the best. The AI project is just the latest example of what we’ve already been hyper-focused on; always disrupting and figuring out how we be most efficient, deliver the best insights, and build the best retirement services business out there.”
Incorporating AI is an initiative across all the parent company’s business lines, which include total rewards and employee benefits, workers comp, cyber risk, and property/casualty, among others. It focuses on two areas, or “buckets,”—large language models (like ChatGPT) and the chatbot space.
“We’re innovating in both of these areas that we do not just believe, but know, will radically transform all the industries we’re currently serving,” Kaplan added. “With large language models, whether scanning 5500s or going through benefit guides for our employee benefits business, we built the tech stack and core capability to start throwing stuff at it. On the chatbot side, we built the core capability to ingest all that data, answer questions, and be very responsive.”
The spark came from Kaplan’s previous role in finance and operations with a plan sponsor, Specialized Bicycles. Responsible for the company’s 401(k), benefits education, and business insurance, people routinely stopped him in the hallways with questions. Many were easily answered, and he thought about an AI solution, a Slack-enabled chatbot, which is now available at Newfront,
“We take all your relevant 401(k) plan documents and employee benefits information, ingest them through a large language model, and you can then go to Slack and ask it questions like ‘What’s my vision plan? How does my health care work? What’s our 401(k) match?’” Kaplan concluded.
It’s just one example of cutting-edge innovation in the retirement plan space, a more efficient and effective solution driving the industry forward.
