PLANSPONSOR - June/July 2018 - 44

of this information you provide to the vendor candidates, the
more thoroughly they'll be able to understand the opportunity, "
Topp says. " And the better they'll be able to provide a consultative
response about what their solution could do to make the plan
sponsor's life easier and improve participant outcomes. "
Five Overlooked Areas
What specifics do sponsors often fail to consider when creating a
recordkeeper RFP? Consider these topics:
1
Cybersecurity. " You need to understand what each vendor
can do with respect to protecting participants' identities and
assets, " Doran says. That includes information such as what
cybersecurity training the recordkeeper has provided to its
staff. For example, request details on the processes a vendor has
for sensitive actions such as verifying the identity of someone
filing for a participant distribution. " You want to understand
what enhancements each recordkeeper has already made to its
cybersecurity and what enhancements each recordkeeper has
coming down the pike, " she says.
2
Customer Service Nitty-Gritty. A pain point, particularly
for many small-plan sponsors-i.e., those with under
$5 million in assets-is that they are not assigned a dedicated
relationship manager. " They have to dial in to an 800-number
instead, " Doran says. " That continues to be a huge source of
stress for plan sponsors, when there is no consistency in who
they talk to at the recordkeeper. So on the RFP, ask questions
such as, 'Will the recordkeeper provide a dedicated relationship
manager, or will we be pushed to a pooled 800-number?' "
When trying to evaluate the customer relationship manageMonitoring
Providers
AS FIDUCIARIES, plan sponsors are required to regularly monitor their retirement plan
providers. For many, part of that process means comparing a provider with its competitors.
While a request for proposals (RFP) may primarily be seen as a way to find a new
recordkeeper, many sponsors also use the questionnaires to benchmark their current
recordkeeper.
The amount of work and information needed to complete an RFP, however, does
not allow for the full process to be done annually-which, increasingly, is how often
plan sponsors (64% overall) say they do a formal evaluation. Keeping in mind that,
overall, 53% of sponsors have stuck with their recordkeeper for over seven years, another
option for monitoring providers is a less specific request for information (RFI). -PS
How Long Has Your Organization Used Your DC Provider?
3.4%
1 year
12.6%
13.6%
12.2%
>1 - 3 years >3 - 5 years >5 - 7 years
55.3%
>7 years
How Often Do You Formally Evaluate Your DC Provider?
63.8%
Annually
9.0%
Every 1 - 2
years
8.5%
Every >2 - 3
years
6.5%
Every >3 - 5
years
Source: 2017 PLANSPONSOR Defined Contribution Survey
3.2%
Every
>5 years
9.0%
Never
2.8%
Don't know
ment (CRM) that the sponsor can expect, Hanna says, one of the
best metrics an RFP can solicit is the average number of plans
assigned to the recordkeeper's relationship managers. " That's
ultimately where the rubber meets the road on the service level
that a sponsor will get, " he says. " Having 80 to 100 plans each
is at the higher end for a relationship
manager, and there you can expect
less service and that the relationship
manager may not be very knowledgeable
about your plan. Five to 15 is on
the lower end, and there you'd expect
white-glove service and a high level of
customization in the service your plan
gets. " The employer can evaluate its
needs beforehand: If it has a relatively
simple plan and solid internal expertise
to oversee the plan, the higher end may
work OK, he says.
3
360-Degree Payroll Integration.
" Payroll integration should
be a real driver of selection for sponsors
but often isn't, " Hanna says. " I'm talking
about full, 360-degree payroll integration-not
only where the payroll provider
can send data directly to the recordkeeper's
system, but the recordkeeper can
send data directly to the payroll provider's
system. " Plans today often get the
first but not the second, he says, so the
employer has to input quantities of data
manually-each automatic enrollment
and automatic escalation change for each
participant-into the payroll provider's
system, Hanna says.
" Without 360-degree integration,
auto-enrollment and auto-escalation are
only automatic for the employee; they
are completely manual for the employer, "
44 PLANSPONSOR.com June-July 2018

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