Changing DC Record Keeper
At a TPSU program held at Marquette University, the HR manager of a 100-person company describes how company approached changing DC record keeper gave them the opportunity to refresh their plan.
Even though she was new to the 401k world, the HR manager realized that changes were in order for her company’s retirement plan so she, along with the president and CFO, began what was a six-month search for a new record keeper. Some of the fundamental questions they faced included whether to go bundled or unbundled meaning whether they should use the record keeper’s in-house TPA services or use a local, independent TPA. In addition, they wanted improved services, especially around employee education, as well as refreshed investment options. In order to improve participation, they were considering making match vesting periods shorter.
After interviewing numerous candidates on the phone and meeting with a few, they selected their new record keeper. The HR manager at the TPSU program thinks that it’s a good idea to conduct a record keeper every few years as the plan can get stale and it keeps their provider on their toes. It usually does not require a change to add new options unless the needs and size of the plan have drastically changed, but it does force senior management to pay attention to the plan and the process which must be conducted in a prudent manner with fiduciary implications. Sometime the only way to get upgraded service or better pricing from the incumbent record keeper is to go through a formal RFP process.
Record keeping changes have slowed down according to a few providers who think that plan sponsors are waiting to see how the new DOL rule will affect their relationship with their service providers. Experts are advising plan sponsors to do nothing right now as a result of the DOL and wait to see what their record keeper, advisor and TPA recommend. The logical conclusion by plan sponsors may be to wait to make any changes including a record keeper or advisor switch.
