PLANSPONSOR - November/December 2017 - 24

getting the lowest fees. "
Many sponsors are still unaware of what their participants
actually pay in recordkeeping fees and what valuable services they
and the plan get for those fees, says Todd Hughes, an attorney
and director, ERISA and vendor services, at advisory firm
Pension Consultants Inc. in Springfield, Missouri. " This is not
something you should just look at every three to five years, when
you do an RFP [request for proposals], " he says. " You should look
at this annually, in some form. If not, you're probably missing
out on getting more services or lower fees for participants. "
With many plan-level services commoditized, recordkeepers
like to promote what they consider their " value-add " services,
says adviser Matt Byers, founder and president of Eminent
Wealth Strategies in Indianapolis. " But you have to define what's
truly important to each plan sponsor, " he says.
What follow are four areas where many plan sponsors find a
recordkeeper can add value.
1) Data analytics capabilities. " The more data we
can analyze, the more we can help a sponsor make good decisions
about its plan, " says adviser Joseph DeNoyior, managing partner
at Washington Financial Group, the 2017 PLANSPONSOR
Retirement Plan Adviser Small Team of the Year, in McLean,
Virginia.
When Ulmer thinks about such " big data, " he recognizes the
value in recordkeepers allowing the sponsor and adviser to define
what specific data they need to help the sponsor make timely
decisions. Some recordkeepers require the sponsor or adviser
to file a request to get customized data; then they need time to
produce that data. Yet, others have the capability for sponsors or
their advisers to directly input the data filters they choose into the
recordkeeper's system and to get an immediate download of the
data needed, he says. He especially appreciates provider tools that
let his team quickly access participant statistics by demographic
factors such as income level and geographic location, to better
identify ways to help improve participants' retirement readiness.
For instance, he says, recordkeeping providers have varying
abilities to supply data about potentially worrisome participant
actions, such as taking loans or making hardship withdrawals;
such data can be useful to help the sponsor address those issues
with plan design and targeted communications. " For example,
it's helpful when we can go in and pull data on the employees who
are not taking full advantage of the employer's match, " Ulmer
says. " Think about how valuable that data is in putting together a
personalized education campaign. "
DeNoyior sees real value in providers that can do predictive
analytics for sponsors on plan-design changes they are
considering. " Many recordkeepers will tell you that they have
plan-health reporting, " he says. " But if it is not dynamic, then we
don't place a lot of value on it. By 'dynamic,' I mean that it allows
us to break down the likelihood of success of a potential design
change based on groups of employees, such as by age, tenure and
geographic location. "
A recordkeeper's predictive analytics can play a key role in
24 PLANSPONSOR.com November-December 2017
Meeting Clients' Needs
How sources determine what provider
services add value to a plan
Eminent Wealth Strategies talks in-depth with sponsors
to identify their " hot button " issues, Matt Byers
says. " We ask them, 'What do you like about your
current provider relationship? What do you not like?' "
he says. " For us, it's about digging into the sponsor's
challenges with its plan, not just presenting the same
solution for every company. "
Washington Financial Group starts by
assessing
the service needs of a client's work force, according
to employee demographics. " Then, based on participant
needs, we look at what tools the plan will need to
get employees engaged in saving for retirement and
the most effective ways to communicate with those
employees, " Joseph DeNoyior says. " We are looking
for recordkeeper differentiators that match our client's
needs, and then we place value on that. "
Pension Consultants gets feedback from sponsors by
having them answer its questionnaire-roughly 200
questions aimed at identifying which recordkeeper
services sponsors value most, and least. " We are locating
the sponsor's 'pain points,' " Todd Hughes says. " Then
we find providers that can fill those holes, and we help
hold the provider accountable for doing that. "
Groom Law Group's Jennifer Eller says much of
holding recordkeepers accountable for service quality
depends on putting together a good service-level agreement,
with clearly defined expectations on specific
services, and penalties if the recordkeeper fails to meet
those standards. The sponsor then monitors whether
the provider adheres to the agreement. Ensuring
ongoing value for services received does not necessarily
require doing a request for proposals (RFP), Eller says.
" As a fiduciary, you need to weigh the cost and disruption
of a potential recordkeeper switch against the need
to ensure that the plan still is getting good value. " -JW
helping a sponsor decide between different plan design options,
says adviser Kathleen Kelly, managing partner at Compass
Financial Partners in Greensboro, North Carolina.
" It is very helpful when a provider can tell you, 'Here's what
your population's retirement readiness is with your current plan
design, and here is what the projected retirement readiness
outcomes will be if you make this design change or that design
change,' " she says.
http://www.PLANSPONSOR.com
PLANSPONSOR - November/December 2017

Table of Contents for the Digital Edition of PLANSPONSOR - November/December 2017
