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Retirement & Succession Plans
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3 min read
During any given year, plan sponsors engage a variety of service providers to perform various services for their retirement plan. It’s easy to allow inertia to take over and to approach these relationships with a mindset of “if it’s not broken, don’t fix it.” While that’s good advice and it’s not reasonable to make a change just for the sake of it, sometimes it helps to take a moment to ensure those you’ve tasked with helping you run an effective retirement plan continue to offer current and relative services.
What Should You Look for in Your Retirement Plan Service Providers?
Do They Make it Personal?
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How are your providers working to engage your participants? Are they focused on outcomes and helping your participants achieve a meaningful retirement?
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How are your providers working to engage you, the plan sponsor? How often do you receive proactive contact to address topical issues or concerns relevant to your plan?
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Management likes results and some way to measure progress but does not like upward delegation. They like to be brought solutions. Are your providers bringing you solutions?
Overall Service Relationship
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Have there been concerns from a service perspective?
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Do the individuals responsible for handling your relationship work well with your organization?
Plan Reviews
Are your providers giving you actionable information or repeated reporting of volumes of information without solutions to move forward? The latter can prove to be more harmful than no reporting at all, so be sure to understand the information that’s being provided.
Participant Experience
This can be a broad and somewhat nebulous term, but while employees are often actively disengaged from the retirement plan it’s important to listen to the feedback you receive. Patterns or trends can often emerge as a result of their experiences with meetings, statements, the website, and other touch points, in addition to activity statistics supplied by your providers.
Investment Reporting or Advice
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Investment reporting simply provides you with information, but without a definitive opinion on your next steps. A report telling you that a fund is in the bottom quartile certainly paints a grim picture, but doesn’t actually tell you it should be removed as an option for your plan.
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Investment advice not only provides you with information but gives you specific advice on your path forward. This would be a report both telling you that a fund is in the bottom quartile and specifically stating that it should be replaced with another investment.
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While there can be a fine line between reporting and advice, there is a distinct difference in the service you receive and the protection you are afforded. Many plan sponsors misinterpret the services they receive.
While changing service providers is typically the result of a failure of one or more of the above factors, periodically issuing an RFP (request for proposal) can provide valuable information regarding what plan sponsors should expect in the current market environment. It also provides documentation of the due diligence required for all service providers. If it has been several years since this process has been completed, we recommend plan sponsors consider taking advantage of this valuable process that can often provide unexpected benefits.
Though conducting an RFP can be overwhelming and intimidating, SWBC stands ready to help. We can make this endeavor easy by managing the search and guiding your organization through the entire process. Contact us today by calling 866.270.4874 or at swbc.com/retirement-plan-services.
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