Provider Searches: What Services are Plans Looking For?

July 5, 2006 ( - CHICAGO - When shopping for service providers, plan sponsors and their advisors cannot be shy when it comes to the specific services for which they are looking.

That was one key conclusion of a discussion panel at PLANSPONSOR’s Plan Designs 2006 conference held at Chicago hotel. The panel discussed key considerations for conducting new provider searches.

Before completing a Request for Proposal (RFP), an individual needs to be an expert on exactly what each provider is giving participants currently. That is why Maria Fuchs, deputy tax collector for San Diego (California) County, told discussion panel attendees that she started by reviewing every existing service agreement. The county has a $650 million defined benefit plan.

“Look very closely about what they can provide you and whether that’s what you need for your plans,” Fuchs said.

Kevin Harley, vice president National Sales manager, Marshall & Ilsley, told the group that they also need to pay particular attention to each provider’s fee structure and to demand full detailed fee disclosure from providers, including those participating in soft-dollar arrangements.

Meanwhile, Heidi Walsh, director of marketing for T. Rowe Price, advised the group to personally visit the finalists in their searches so they can better understand how each company operates within its own corporate culture.

“I believe kicking the tires is really critical these days,” Walsh said.

Robyn Credico, national director of defined contribution consulting, Watson Wyatt Worldwide, said plan sponsors involved in a search likewise need to make sure the finalist providers can comfortably service a program of their size and will be comfortable with the amount of client “hand holding” the employer wants.

Harley suggested also asking providers for a statement about their future commitment to the business.