Nevin's Data "Points"

Shopping for a new provider is not something one would normally equate with a Black Friday foray or a Cyber Week scramble. But if you have a plan sponsor — or plan sponsor prospect — who’s thinking about shopping for a new provider, here are some ideas to share. Make a list — and yes, check it twice. In an area fraught with as much potential complexity as searching for a retirement plan provider, it’s easy to think you can learn what you need to look for by simply going through the process. And while it’s certainly a learning process, doing so without a sense of core needs is a bit like going grocery shopping on an empty stomach; everything will sound good, and you’ll likely overload on the “sugar” (and perhaps overpay as well). Even Santa Claus makes a list — so should you: of plan design features (real and anticipated) that you want supported. Don’t neglect the problems. Odds are if a plan sponsor is serious about a change in providers, there’s a reason – ...

Working with retirement plans is a complicated, challenging and constantly changing process. That said, there are certain constants — and things that bear repeating and/or reconsidering from time to time. Since I published my first list of 15 last fall (one of my most popular, as it turns out), I’ve gotten several very good suggestions — and had an epiphany or two. Here are a few (more) points to ponder: Cheaper isn’t always better, unless it’s the only difference. Sometimes you do get what you pay for — but not always. If you’re not doing anything “wrong,” you probably aren’t doing anything much. You can spend a lot of money in court being right. A fund whose allocation is based solely on date of retirement is sure to miss something, but not as much as a fund whose allocation doesn’t take that into account. If you don’t know how much you’re paying, you’re likely paying too much. Don’t assume that those who aren’t saving via your workplace retirement plan know what they ...

My single memory of venturing out on Black Friday to shop came at the instigation of my “little” sister, who has long undertaken such forays. Nor was this to be a random shopping expedition — armed with circulars and coupons, she directed me and my two brothers with the fervor and furor of General Patton as to which stores we were to invade, the objective(s) of these intrusions, and in some cases, the line(s) in which we would take up residence while she pursued items she (apparently) did not trust to the pursuit of mere amateurs. Shopping for a new provider is not something one would normally compare with a Black Friday foray, but if you have a plan sponsor — or plan sponsor prospect — who’s thinking about shopping for a new provider, here’s a list they may find useful. Make a list — and yes, check it twice. In an area fraught with as much potential complexity as searching for a retirement plan provider, it’s easy to think you’ll learn what you need to look for by simply going...

RFPs, or requests for proposals, come in all shapes and sizes. Mostly they are long, drawn out affairs, frequently copied from templates drawn up to capture a broad sense of capabilities. The problem is, for most plan sponsors it’s akin to going shopping for a car armed with Chilton’s auto repair manual (that said, if you need one, a quick Google search on “401k RFP” will turn up plenty). So, aside from all the general information that you’ll want to get from every provider during the RFP process – the size of their business, the quality, tenure and turnover of their key staff, their capabilities, service structure, years and investment in “the business,” fees, services offered and references, there are some questions that aren’t in every RFP — but to which the answers can be enlightening. 1. What plan design changes would you recommend, and why? This question has two payoffs. First, in order to recommend changes, they have to know what your current plan looks like. Secondly, it...

Whether or not you’re in the habit of making New Year’s resolutions, this is a time of year when reassessments seem appropriate, and perhaps in no area as much as that of retirement plan administration. Many find themselves in the role of plan sponsor (or plan committee) with no background, limited training, and far more responsibility than they may appreciate at the outset. For those of you who find yourself starting the year with new plan sponsor clients, or new members of the plan committee, or perhaps even incumbents who could benefit from some New Year’s resolutions, here’s five things every plan sponsor should know: How much your 401(k) plan costs. Okay, fees are just one of several factors plan sponsors need to consider, but when the fees for services are paid out of plan assets, there is an obligation to understand the fees and expenses charged. This is important because you are expected to ensure that the fees paid and services rendered to the plan are reasonable. It’s h...

I participate in a number of LinkedIn groups (and “sponsor” a couple). In one of those groups last week, a member said they were interviewing potential new 401(k) recordkeepers/advisers—and asked a provocative question: What is the one question that you will be sure to ask the next time that you interview potential 401(k) providers? Of course, we all know that the search for a new provider entails a lot more than a single question. And, as I skimmed my way through the suggestions that had already been proffered, there were a number of important and familiar inquiries; things having to do with the fees charged, fee disclosure, the quality of support staff, willingness to stand in as a plan fiduciary…. These are all important—so important, in fact, it was hard to imagine that they wouldn’t be routinely included in even the most casually composed RFP. Having read the question—and skimmed the answers—I was about ready to move on. Ironically, the way this question was phrased (or at leas...

Several years back, we decided that our family was ready to upgrade to a high-definition TV (in fairness, that “decision” was in no small part predicated on the untimely “death” of the big-screen projection TV that we had purchased not too long after we married). So, I did what any reasonable consumer would do— – I went to my local appliance warehouse to see what was available. In short order, I was able to enlist the support of a trained professional (a “professional,”, it should be noted, who turned out to be younger than the TV that we were replacing). Not that he wasn’t helpful, after a fashion. But there in that “showroom,”, it was hard for me to see (or appreciate) all the subtle differences that purported to explain the occasionally significant variances in price. Moreover, he spoke in alien terms that were clearly something I was supposed to understand— – but didn’t. And, while I don’t mind probing for explanations, after a while, even the most diligent shopper gets tired...

Being a plan fiduciary is a tough job—and one that, it’s probably fair to say—is underappreciated, if not undercompensated. In my experience, most who find themselves in that role (see “ IMHO: Duty Call ”) do an admirable job of living up to the spirit, if not the letter, of their responsibilities. Nonetheless, there are plenty of areas in which we could do a better job. In this week’s column, we’ll touch on the rest of my “10 things you’re probably doing wrong” list: 6. Thinking your plan qualifies for 404(c) protection—and misunderstanding what that means. Any number of studies suggest that many, perhaps most, plan sponsors think their plan meets the standards of ERISA 404(c ), a provision that ostensibly shields them from being sued for participant investment decisions, so long as certain conditions are met. On the other hand, industry experts are nearly uniform in their assessment that very few, perhaps no, plans meet those standards (though the courts have been somewhat more lib...

One of the most common—and consistent—inquiries I receive (via e-mail, anyway) is from readers looking for help in choosing a plan provider. I am always flattered by the request, and always try to do my best to point them to the resources we have on our site (our annual Defined Contribution Survey and the annual Recordkeeping Survey are quite popular). Still, there is only so much help one can offer without a fuller understanding of the current needs of the program, as well as the goals and objectives set for the future. Furthermore, providers, like plan sponsors, have "personalities" and, in my experience, sometimes the chemistry that a good relationship needs to thrive just is not there, even when the plan's needs are reasonable and the provider's capabilities are top-notch. Yes, picking the best provider for a retirement plan is one of the most important decisions a plan sponsor can make—both in terms of fulfilling their fiduciary obligation and in what might affec...