To avoid class-action settlements and regulatory penalties that can cost millions, plan sponsors must ensure 401(k) fees are cost-conscious for participants. Here are best practices to consider.
When a plan sponsor (or search specialist working on the plan sponsor’s behalf) squeezes a vendor too tight, the resulting contract may come with an attractive price tag, but it will set plan sponsors up for a downstream nightmare of quality and service issues that negatively impact both plans and their participants.
As a defined benefit (DB) plan sponsor, it can be difficult to determine whether the fees you are paying for actuarial services are reasonable. Here are some ways to evaluate whether actuarial fees are in line with the services provided.
“Free implementation” has become a ubiquitous element of benefit plan administration proposals. The appeal to plan sponsors is understandable, but rest assured, with free implementation, you get what you pay for. Understanding the true cost of implementation will help plan sponsors evaluate potential benefit administrators and initiate the implementation process with eyes wide open and a more realistic budget.
The benefits outsourcing market is evolving rapidly, making it hard for plan sponsors to know what to look for — and who to consider — when preparing RFPs for the outsourcing of defined benefit, defined contribution, health and welfare and nonqualified benefits. Here are some tips.
When selecting a provider for voluntary benefits, small to midsize companies often turn to the same broker that serves their medical or retirement plan needs. But medical and retirement benefits brokers may lack the knowledge or impartiality required to deliver optimal service in the voluntary benefits space. An unbiased third party that neither sells insurance products nor receives commissions when its clients select insurance products can help with the broker search.
Occasional employee complaints about a benefit plan are inevitable. But when they become a regular occurrence, it can point to more significant problems with a plan administrator or other vendor. Companies that find themselves in this position have several options — including an often-overlooked option that we call “vendor recovery.”