The Crucial Importance of Benchmarking Your Plan Advisor
It may not be widely known how important it is to do a Request for Proposal on BOTH your Record Keeper and Plan Advisor, but it is crucial. An RFP is a process used to request and assess bids from potential vendors, and it can help ensure that you are selecting the best Record Keeper and Plan Advisor for your needs. By conducting an RFP, you can make your own intelligent decisions based on adequate research – identifying strengths and weaknesses, and ultimately making an informed decision.
At the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held in Arlington, Virginia at Virginia Tech, Founder and CEO Fred Barstein spoke with Plan Sponsor Kelly Campagne, a Chief Talent & Administrative Officer for Meridian International Center, a non-profit based in Washington, DC of about 150 employees. During the program, Campagne questioned whether doing a Request for Proposal on one’s retirement plan advisor is worth doing. Like Campagne, many plan sponsors do not regularly think to benchmark or compare the performance of their retirement plan advisors amongst other advisors.
Conducting an RFP demonstrates due diligence on the part of the plan sponsor, which can help protect the plan sponsor from potential legal liability.
Overall, conducting an RFP on your retirement plan advisor and record keeper can help guarantee that you are getting the best possible service at a reasonable cost, while also protecting your plan and your participants.
Read the Full Transcript Here:
Fred Barstein:
This is Fred Barstein, CEO and founder of TPSU here at Virginia Tech in Arlington, where we just completed a TPSU program. And I’m here with one of our plan sponsor attendees. Kelly, welcome Kelly.
Kelly:
Thank you.
Fred Barstein:
Okay if we ask you a few questions?
Kelly:
Of course.
Fred Barstein:
Very good. Before we do, tell us a little bit about yourself and the size of your organization.
Kelly:
I work for an organization, a nonprofit in Washington DC. We have about 150 employees and I am the chief talent and administrative officer.
Fred Barstein:
Chief talent, we have very creative… We had the chief people officer.
Kelly:
Yes.
Fred Barstein:
That’s great. So today we’re talking a lot about benchmarking and the fiduciary responsibility of going to RFP and we were really focused on the record keeper, but you raised what I thought was an interesting question. Can you explain what you said and why, and also what people should be thinking about?
Kelly:
Well, you all brought up the very good point that we need to do an RFP for our record keeper every five years, three to five years. So we’re overdue for that. And I’ll put that into motion. But it also brought up the question for me of should we do an RFP for our advisor? And the answer was yes, that we should.
So I guess now my next steps are how do I go about doing that?
Fred Barstein:
Yeah. So what are the resources that you’re going to use to do that?
Kelly:
Honestly, I’ll reach out to my advisor because I think she’ll be very helpful with it. Certainly for the record keeper piece. And because she’s so good, I think she’ll also give me some advice on how to do the RFP for her and she’ll be fine with it.
Fred Barstein:
Right. But it is a conundrum because they can’t do an RFP for themselves.
Kelly:
Of course. Of course.
Fred Barstein:
And if they do, they have to recuse themselves on it.
Kelly:
Yes, but she would just give me advice and then I would take it from there.
Fred Barstein:
And maybe there are some resources out there?
Kelly:
Yes. And then I’ll do some Googling, like everybody.
Fred Barstein:
We’ll do it right. Google answers all the questions because the issue is if you’re using plan assets to pay a vendor, that’s when you have to do the RFP.
Kelly:
Yes.
Fred Barstein:
And the benchmark.
Kelly:
Which makes sense. It just hadn’t really clicked in my head before.
Fred Barstein:
Right. But even for other things, important functions, you do RFPs for other vendors as well.
Kelly:
Yes.
Fred Barstein:
When you need a service. So why not this? Great. So final question, just how was the program and maybe one or two things you learned?
Kelly:
The program was great as always. This is my second time coming here, so it was great refresher.
I think the one thing I learned was what we just talked about, the necessity of doing these RFPs. I also find value here in just hearing what other folks are doing, who are in my position.
Fred Barstein:
Your peers.
Kelly:
My peers and colleagues, and where their challenges are, what they’ve had success with. I think that’s always very helpful.
Fred Barstein:
Right. Adults learn from adults more.
Kelly:
Yeah, and adults learning from adults and I always take it home with me. So that’s something.
Fred Barstein:
Right. We can learn from children too, but not as much. Well, great. Well thank you for your time. Thank you for your participation in the program. You’re always welcome back and thank you for watching 401K TV. And please make sure you attend a TPSU program near yo
