Navigating the Challenges of Record Keeper Acquisition
Transitional periods often come with difficulties and the transitional period when acquiring a new record keeper can similarly be difficult. It is a crucial time for an organization’s record-keeping practices as a reliable record keeper plays a critical role in ensuring the integrity and accessibility of an organization’s information assets. Because of this, proper planning, management, and oversight are key contributors to mastering a successful transition.
At the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held in Charlotte, North Carolina at The University of North Carolina, Founder and CEO Fred Barstein spoke with Plan Sponsor Pam, who works as a Plan Administrator for a company of 600 people. Pam acknowledges the challenges that her team has encountered during the transition of acquiring a major record keeper, particularly with regards to the shift towards a majority digital approach. Although Pam has faced obstacles throughout the process, she remains committed to ensuring a successful transition in an attempt to ease the concerns of her staff who have had previous anxiety toward the frequent changes in their 401(k).
Read the Full Transcript Here:
Fred Barstein:
This is Fred Barstein, CEO and founder of the TPSU program. We just completed a program here at the University of North Carolina at Charlotte, and I’m here with Pam.
Pam:
Yes.
Fred Barstein:
Okay if we ask you a few questions?
Pam:
Sure.
Fred Barstein:
Before we do, tell our audience a little bit about yourself and the size of your organization and your role.
Pam:
Okay. Hi, I’m Pam. I administer four plans for 600 people. I work in payroll and benefit management. I function as the plan administrator for all four of our plans.
Fred Barstein:
So, Pam, one of the things you mentioned today, which is happening more and more frequently is your record keeper, and it wasn’t a small record keeper, was acquired.
Pam:
Yes.
Fred Barstein:
And sometimes that can cause issues for you in the interim. Tell us a little bit about some of the issues, because I’m sure that a lot of people are going through that.
Pam:
Yeah. Initially I think that just how to handle distributions was the first thing we encountered. We had not been trained on how that function worked with the new record keeper. As time has passed, how to handle testing and answering just general questions that we have. We don’t know who to contact always. So that it’s been a challenge.
Fred Barstein:
Because the team that you were working with…
Pam:
Yeah. Our team initially was going to move over, but in the process of the transition, all of them have left. So we’ve kind of been left stranded on an island alone.
Fred Barstein:
Trying to find your way. And the other thing you mentioned was the new record keeper wants to do everything digitally. What kind of problems would that cause you?
Pam:
Well, when we submit testing for one thing, if it doesn’t match something that they have in their system that I can’t see, it rejects it over and over and over again, and it takes time to get that done. Just in distributions, I don’t always get all of what I need to make a decision because we approve all of our distributions ourselves versus allowing our record keeper that function. So those are some of the things we’ve encountered. Getting questions answered for testing has been an issue.
Fred Barstein:
Right. On that, so it’s just really, you don’t know who to call in your… right? But yet you said you were reluctant to change record keepers. Why?
Pam:
Yeah. I know that the transition from one company to another causes our employees concern. Why are we changing? Why is my 401k moving? And then seeking out a potential new record keeper, I feel like that would cause anxiety among our employees and maybe question whether or not they should contribute to their 401K.
Fred Barstein:
Because they already went through a change.
Pam:
They went through a change. Why are we changing again? Is my money safe?
Fred Barstein:
Which is why a lot of people, when their company is acquired before they transition, they go out and do a search.
Pam:
Right.
Fred Barstein:
So they’re making a decision.
Pam:
Right. We opted to make that transition because our team was going, we were told this was going to be a good transition. We did our due diligence, our fees were going to stay the same. It wasn’t until we got over there that we realized that things weren’t quite like what we were promised in going into that, so.
Fred Barstein:
All right, great. Final question for you. How was the program? What did you learn and would you recommend it?
Pam:
The program was awesome. I think the thing that refocused me is going back to my company and say, “Hey, I would love to be able to tell our employees that we have a retirement plan that allows our employees to retire at normal retirement age with dignity.” That really hit home with me with what Chris and Greg said today, and looking at what makes a good plan and where we stand within what makes a good plan, and allowing us to come back and look at our own plan design to hopefully accomplish that goal.
Fred Barstein:
Great. Well, thank you for your time today.
Pam:
Thank you.
Fred Barstein:
And thank you for watching 401k TV. Please stay tuned.
