When you’re not getting the performance you’d expected from your organization’s employee retirement plan, you might become concerned you’re not receiving enough value or meeting your fiduciary responsibilities.
If you reach out to your plan’s provider to find out what’s going on and are met with inadequate or nonexistent replies, it may be time to shop around for a new employee retirement or 401(k) plan provider.
Before you switch, you need to conduct a review process of your current 401(k) or employee retirement plan. You also need to interview new potential providers to make sure you’re getting a better deal.
Learn how you should start your 401(k) plan review process and five questions you need to ask potential new providers.
Starting The Employee Retirement Plan Review Process
If you bring in potential plan providers immediately, you’ll be subjected to a series of sales pitches that aren’t very helpful and actually make your selection process more confusing and difficult.
Instead, start your employee retirement plan review process by meeting with an advisor or a credible third-party expert. You need to evaluate each aspect of your current plan to see what’s working and what isn’t.
During this process you should examine your current plan’s:
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Administrative and overall plan costs
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Investment options
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Participation rate
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Levels of service to participants and sponsors
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Effect on your employee recruitment and retention
While you may already have a general idea about this information, it’s beneficial to get an outside perspective to analyze the performance of your plan. It also helps you clearly identify your goals for finding a new employee retirement or 401(k) plan.
Once you and your third-party advisor have completed your self-assessment, begin compiling a list of potential new plan providers. Then, narrow down that list to three to five potential providers. Any more than that and you’ll waste valuable company time and be overloaded with information.
5 Questions To Ask Potential Employee Retirement And 401(k) Plan Providers
Once you’ve narrowed down your list of potential employee retirement and 401(k) plan providers, evaluate them by asking the following questions:
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What is your track record with participation rates when providing plans for other companies?
Participation rates are a critical metric when it comes to measuring the success of a 401(k) plan. If employees aren’t participating, you risk losing tax benefits, not meeting your fiduciary responsibilities, and missing employee retention and recruitment goals.
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How did you achieve those retirement plan participation rates?
You need to get a sense of the plan provider’s tactics for encouraging participation to evaluate whether they’re likely to be successful with your employees.
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Can you provide contact information for references?
You should speak to some of the plan provider’s customers to find out if they are happy with the service. If your potential provider is unable or unwilling to provide references, that could be a red flag.
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What breadth of investment options do your plans offer?
Broader options help your employees tailor their retirement plan investments to their unique goals and needs. It could also help them get better results. As you’re likely participating in your company’s retirement plan, this benefits your investment options as well.
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What level of service and support does your plan offer?
Ideally, your plan provider should meet with your trustees and plan participants multiple times per year. When meetings occur on a regular basis, participation rates often reach 80%. When meetings only occur once a year, plan participation rates sometimes plummet below 50%. The level of service plan providers offer makes a real difference to the success of your plan.
Finding An Employee Retirement Plan That Benefits Your Business
If you decide to skip the questions above and simply select the provider with the lowest costs and slickest sales presentation, you may end up with lower rates, but could also be burdened with a plan that is inferior to the one you have currently.
Give your company the employee retirement plan it deserves by conducting a thorough review. By going through this thorough process, you’re more likely to choose a plan that yields a high participation rate and tax advantages, which should prove to be a powerful tool for employee retention and recruitment.
Explore how retirement benefits impact employee retention by reading our free e-book, Make Retirement Benefits Your Secret Weapon For Employee Retention.
