Service-oriented attitude. A good attitude goes a long way
for a service provider trying to stand out from their competition. “It starts
with the vendor having a service-oriented attitude toward the client,” Hilbrant
says. “You get hired for who you are and how you bond with folks.”
The provider should demonstrate high-quality services from
the beginning by asking questions about what is important to the client, rather
than acting as if the client were just another piece of business on the books,
he says.
Another way providers can demonstrate their client-focused
attitude is by being prepared, such as by bringing customized samples of
educational materials and Web demonstrations. “It shows that you did your
homework,” Hilbrant says.
Charlie Nelson, president of Great-West Retirement Services,
says you can gauge a provider by its service model and materials. Sponsors
should ask, “Will [it]provide information to my participants to help them
improve retirement readiness? How can different types of employees activate
that service?”
A good provider will make information accessible through
multiple media channels, such as print and the Web, as well as through
in-person meetings with their representatives. Good providers also make
on-demand reporting available on their websites, Mee adds.
Financial stability. “In today’s world, with a number of
things that have occurred since 2008, plan sponsors need to look at the
financial strength [of a provider],” Nelson says. If the provider does not have
solid financial footing, this can affect participant services, he notes.
Whether a provider has a responsive call center, as well as various
technologies and a decent website, also indicates financial well-being.
Moreover, it is important to determine whether the provider has the financial
strength to expand services in the future, to accommodate fallout from the new
fee disclosure regulations, in particular, Nelson says.
Compliance expertise. In Nelson’s opinion, very few RFPs
contain questions about 408(b)(2) and 404(a)(5) fee disclosure regulations.
Under the DOL’s 408(b)(2) regulation, most service providers of retirement
plans are required to disclose information about fees and services to plan
sponsors by July 1; the 404(a)(5) regulation requires plan sponsors to provide
fee information to participants by August 30.
According to Deloitte’s 2011 Annual 401(k) Benchmarking
Survey, the majority of participating plan sponsors said that new compliance
requirements related to fee disclosure will significantly affect the
administration of their plans. Seventy-one percent of plan sponsors ranked fee
disclosure regulations as “quite important” or “very important.”
Nelson says plan sponsors should be asking potential
providers for specific examples of how they will help them meet compliance
under the new regulations. Sponsors should also ask whether the providers have
updated their service agreements, as well as request examples of what the
participant will receive under the new 404(a)(5) regulation.
“Every year, it gets just a little more complicated,” Hall
says, so providers must find the most effective ways to work with their clients
and uphold compliance standards. A good provider should have technology,
operations and legal support, he says.
A good provider will also take the time to explain
compliance regulations and the ramifications of not following them, Mee says,
and should present alternatives in the event that a compliance issue arises.
“When there are compliance issues, there are providers out
there who don’t just send a report,” Mee says. “They take the time to make sure
the plan sponsor is understanding what’s going on and offer alternative
solutions to resolve the issue or change the plan design.”
Sponsors should ask provider candidates questions like, “If
there is a compliance issue, how will you resolve it with me? Will you offer me
alternatives if they exist? Will you consult me regarding the issue?”