PLANADVISER - July/August 2017 - 40

current service providers-and then review [them] with the
client, " he says.
Or a hospital may have a 403(b), 457(b), 457(f) and a
defined benefit (DB) plan. Phillips says, if the hospital wants
to get all that reporting to participants on one platform, it
must ask about that capability in the RFP. He adds that an
adviser could do separate RFPs for each plan, then see if
one provider could take a data feed from a second provider
and include that information on its reporting systems; more
commonly,
though, one RFP for the combined business
would be issued, to benefit from the economies of scale.
Phillips also suggests using open-ended questions,
" asking a service provider, 'What additional information do
you need from us to give a comprehensive proposal?' then
analyzing its response. " This can help plan sponsors determine
the vendor's level of interest in working with it as a
client, he says.
Compass' RFP allows recordkeepers to expand on and give
unique perspectives about what differentiates them. " It takes
more effort to evaluate an essay answer rather than a 'yes' or
'no,' but it gives plan sponsors a better idea of what it would
be like to work with that recordkeeper and how it views its
uniqueness and innovation, " Kelly says. " It also allows us to
evaluate what the relationship will be with the client. It's
more work on our part, but we will be able to identify what
provider may be a better fit relative to the client's needs. "
Learning What Plan Sponsors Want
Phillips says, for the adviser, the search is about setting goals
and asking what products or services the plan sponsor would
actually utilize. Then, go with the most effective solution
at the best value, whether this is the incumbent or a new
provider. " Naturally, everyone wants to get good value, with
a focus on reasonable fees and transparency of fees, " he adds.
As Kelly puts it, plan sponsors want a responsible,
knowledgeable service team-one inspiring confidence
Differentiators
For Recordkeepers
Tools to assess plan
health and consultations/
recommendations
about improving plans
Ability to customize
communications to plan
sponsor brand
Tools to help employees
manage student loan
debt
Determination of
response to the
Department of Labor
fiduciary rule provisions
Basic financial wellness
education/programs
Aggregation of other
assets in retirement
readiness calculators
Ability to take on loan
and hardship approvals,
handle qualified
domestic relations orders
and monitor eligibility
Ability to take on the
provision of required
notices to plan
participants
Reasonable and
transparent fees
Communication
with plan sponsors
about issues for which
recordkeepers have
expertise, such as
nondiscrimination testing
Use of technology and
innovation for plan
sponsor/participant
transactions and
communications
Good call center and
web-based platform
that their firm is executing its duties well and is meeting
compliance standards.
In more specific terms, sponsors want recordkeepers that
can deliver on outsourcing of loan and hardship approvals,
handle qualified domestic relations orders (QDROs) and
monitor eligibility, she says. " Clients are also asking about
how the recordkeeper has been able to move the needle for
clients like them using technology and innovation, " she says.
Additionally, plan sponsors expect providers to have
an efficient means for handling routine payroll contributions
and census data-an automated file transfer process,
according to Phillips. They want service providers to take
care of regulatory notices required for informing participants
about plan features such as automatic enrollment,
qualified default investment alternative (QDIA) usage and
fee disclosures. And they want them to perform discrimination
testing and complete the annual Form 5500. For the
latter, they expect recordkeepers to collect all pertinent
data over the year, to avoid having to spend extra time
filling the form out later.
" Plan sponsors also want to know providers have their
back, " Phillips says. For example, sponsors usually lack
expertise in nondiscrimination testing. If their plan fails a
test, they want assurance the provider can suggest testing
alternatives. They want a provider that can explain whether
to use the prior year's data, in order to give highly compensated
employees a heads-up about adjusting their contribuTable
Stakes
For Selecting Providers
Responsible,
knowledgeable
service team
High level of
confidence in executing
recordkeeping well and
meeting compliance
40 | planadviser.com july-august 2017
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