As we covered in Part 1 of this series, recordkeeping and administration of retirement plans is multifaceted, and the proposals for these services reflect that complexity. The proposals also serve as marketing documents for the vendors and must be evaluated with an eye for differentiation and services. A scoring matrix can assist in evaluating vendors during a Request for Proposal (RFP) process.
The substance of most proposals fits within one of the following eight categories:
In Part 2, we discuss the criteria surrounding the organization's administration and compliance, their technology capabilities, and their implementation process.
Recordkeepers take on much of the administration and compliance of retirement plans. Their experience and scale should help make plan operations easier. There are several important functions that recordkeepers fill, and their responses should include breadth of services, quality control, and resources available.
- Legal plan document support and maintenance
- Testing services to meet annual compliance requirements
- Preparation and fulfillment support for required participant notices
- Integration with payroll providers
Technology is used by both participants and administrators. It has both outward and inward-facing functions. For participants, it is a primary source for information, education, and resources. For administrators, it is a tool to track plan health and manage operations. While most recordkeepers have made significant investments in their technology platforms, no two are exactly alike.
- What is the recordkeeping platform? Is it proprietary?
- Cybersecurity resources
- The look and feel of the participant website
- The tools of the plan sponsor website
- Mobile capability
- Reporting capability
The importance of implementation team support is hard to understate. The process of transitioning a retirement plan from one vendor to another is one of the most common reasons plan sponsors state for not wanting to conduct a vendor search in the first place. The project is time consuming for internal HR partners.
The good news is that recordkeepers have dedicated teams that specialize in transitioning retirement plans with well-developed processes that are designed to ease the burden on internal HR teams.
- The composition and experience of the implementation team
- The number of transitions the implementation team completed with the incumbent recordkeeper in the past three years
- Seek to understand how the implementation team manages communication with the plan sponsor and advisers
- How are ongoing service team members incorporated into the implementation process
In the coming weeks, we will be sharing the remaining two categories in Part 3 of this informational series.
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