However, according to the survey report, a larger proportion of sponsors are unhappy with their provider’s performance and the number seriously dissatisfied has seen significant growth, compared to the most recent similar study in 2005.
Spectrem said more than 60% of sponsors award their providers an “A” or “B” grade – about the same as in the earlier poll. Some 38% would mark down their providers to a “C” or a “D,” and those slapping their provider with the “D” grade shot up to 15% from 5% in 2005.
Spectrem surveyed 150 defined contribution plan sponsors to determine the plan providers’ performance in building and maintaining relationships. Overall, one-third gave an overall grade of “A” for relationship management efforts, while the largest proportion, 43%, gave a grade of “B.” Some 18% said “C,” and the remaining 7% gave a grade of “D” or” F.”
Regular legislative/regulatory updates were a particularly big hit among sponsors, with 75% saying they received such briefings from their providers. Sixty-two percent rated the value of the information as a four or five on a five-point scale, Spectrem found.
Another popular provider relationship-building tool among sponsors was the opportunity to give feedback. More than half say they have been asked to respond to a satisfaction survey, attend a client conference, serve on a customer advisory board, or give feedback on new product/service ideas, and virtually all who were asked actually participated in the provider feedback activities.
Among those sponsors not asked for feedback, four in 10 said they would gladly reveal what they thought if given the opportunity.
Spectrem found smaller plans report they are not as satisfied with providers as their larger counterparts. Sponsors of plans with assets of $50 million or more are the most likely to grade their provider "A," while those with assets of less than $10 million are most likely to hand out a " C" or "D," the survey report said.
Across all segments measured by sponsor size, when asked what their plan providers need to do to earn an "A" grade, the most frequently mentioned action was to be more proactive with plan improvement suggestions. Meanwhile, mid-sized employers said they wanted their providers to better understand their firm, and those at small plans (under $10 million) wanted more provider responsiveness - particularly in the speed with which they return calls.
The number of sponsors not hearing from their providers for a month dropped from 24% in the 2005 poll to 13% in the latest survey, Spectrem said. Sponsors said they initiate contact most often; more than 85% exchange regular e-mails with a provider representative.
Finally, Spectrem found that only 5% of sponsors vowed to head for the exits in the next year to find another provider, and another 15% said they were somewhat likely to do so.
According to the report, mutual fund and stockbroker/investment companies are the providers used most often by respondents. Insurance company share is highest among the smallest plans. Mutual funds are used most often by small companies and by those with plans of $50 million or more in assets. TPAs have their greatest penetration among companies with $10 million-$50 million in assets. Banks have the lowest share in the sample across all size categories.