1) Have a sound reason for changing to a new provider. That reason could be: improved service, less administrative burden, better tools and resources for participants, more plan sponsor support services, more access to a broader range of investments, and so on.
Examples of bad reasons: our broker gets paid a bonus if we transfer (conflict of interest), we just feel like this vendor might be better (lack of due diligence/uninformed buyer), this vendor will have better investment performance (simply not true – performance depends on the investments that YOU select).
Having sound reasoning is important since you’re in charge of other people’s money and you’re charged with doing what’s in their best interest!
2) Do have an RFP process. It’s really important to make sure that all the providers got the same information about your plan. Sometimes this means solving some problems in advance with your Retirement Planologist (like investment philosophy, plan design changes, or an education plan) so that there will be an even comparison across the board. Otherwise, you might confuse proposed solutions with provider features.
3 & 3.5) This won’t be easy. Two things are key in a provider transition:
a. Information. Go ahead and collect important documents detailing the historyof the plan (testing, amendments to the plan document, notes, current and terminated participant lists, etc.) in advance of terminating the contract. It will pay dividends to be organized as you transition to the next vendor. Having information at your fingertips will save you from having to go back and forth repeatedly with the former vendor, who isn’t really excited about helping you now that you’re halfway out the door.
b. Project Management. The transition will have lots of moving parts and deadlines. When you are shopping for your new provider, make sure to ask how the process works. Get a feel for how you and your team can bestproject manage the responsibilities that belong to you during the transition and keep up with everyone else’s tasks.
We do vendor searches all the time if you feel like you need some guidance on finding the right vendors for your plan.
Courtenay Shipley has a diverse background in the retirement plan industry providing a unique foundation for her clients in the areas of fiduciary responsibility, investment analysis, and participant education. During her career she has provided institutional investment consulting to qualified retirement plans, developed business strategy for a boutique third party administrator and recordkeeper, conducted over 9,000 education meetings to groups and individual employees, and served the nonprofit market.
She is the founder of Retirement Planology and a facilitator of several Her Corner groups.
You can view her profile HERE.