When the stock market is good, some benefit managers are willing to give some slack on the administrative side of the retirement plan — how quickly are statements produced, the timeliness of distributions, etc. With the market in turmoil, discontent in any of these areas could have you looking for a new administrator. Here are some tips for choosing the right administrator for your plan:
- Start early.
If you are looking to put a new administrator in place for the beginning of your plan year, then starting your search two months before your plan year end won’t get it done. Depending on the complexity of your plan, you should start your search no later than six months prior to when you want to make your change. Twelve months is optimal, and gives the new administrator time to work out all of the details.
- Develop a good Request for Proposal (RFP).
Let Workforce know if you’re interested in us developing a standard RFP you can send out to multiple vendors.
- Check references thoroughly.
Although checking out other companies and their experiences with a potential vendor is optimal, there are other unbiased resources for comparing vendors. One of the newest marketplaces for rating vendors is www.401kexchange.com. This site is a marketplace for both employers and vendors to size each other up for suitability.
- Insist on performance guarantees.
Administrators in competitive situations will often agree to guarantee administrative issues such as statement turnaround. Failure to meet the guarantees means fewer fees for you!
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