The Case for an RFP, Even for Happy Plan Sponsors

It’s fee benchmarking season here at Multnomah Group, which means that we are reviewing scads of fee disclosure documents to assist our clients in understanding the fees paid by their plans and confirm whether those fees are reasonable for the services received. Our benchmarking compares an individual client’s fees to what we would expect to see as bids to provide recordkeeping and administrative services as part of a competitive search. This annual process of reviewing fees and negotiating when they are out of range has meant that our clients’ fees have stayed within market rates as fees for recordkeeping continue to compress. Because of this success, we often get questions about why a plan sponsor would spend the time and resources to conduct a request for proposal (RFP) project if they are happy with their service provider and fees are in range. Here are four reasons you might consider conducting a search even if you feel your fees and services are reasonable.

  1. Leverage for further reducing fees – in our experience, even plans that are in range at the time of a search can expect a better pricing quote from their incumbent as part of a search. Recordkeepers don’t want to lose your business, so find a way to sharpen their pencils to retain the plan.
  2. Fiduciary liability insurance – most of our clients maintain fiduciary liability insurance, and the underwriting on those policies has gotten more extensive over recent years. At policy renewal time, many insurance providers will ask when the last recordkeeper search was completed and incorporate the response into their overall risk and pricing assessment.
  3. Better service – while fees have continued to decline, the quality and quantity of services provided by recordkeepers continue to improve and expand. A search can help plan sponsors see what is the market standard for services and either take advantage of advancements with their incumbent or make a move to a new provider.
  4. Fiduciary risk – the courts have made clear that there is no substitute for a competitive recordkeeper search, and fee benchmarking alone is not enough for prudence in monitoring fees and services. Best practice is to seek competitive bids every 5 to 7 years.

Even organizations who are happy with their provider and fees can benefit from a search, and conducting the search does not require a recordkeeper change. Reconfirming that the current recordkeeper is still the right partner is a common outcome of this process.

At Multnomah Group, we have a dedicated internal team and resources for conducting recordkeeper searches and have put together a process that focuses on

  • Receiving quality responses from proposing vendors,
  • Analyzing and scoring those responses to create straightforward summaries for Committees,
  • Consultative recommendations for Committees customized to their needs, and;
  • The efficient and effective use of Committees’ time.

For more information about recordkeeper searches, please reach out to any of our consultants or take some time to review a few of our other resources on the subject:


Multnomah Group is a registered investment adviser, registered with the Securities and Exchange Commission. Any information contained herein or on Multnomah Group’s website is provided for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Multnomah Group does not provide legal or tax advice. 

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