Conducting a Retirememt Provider Search

Topics: Pension, 401(k), Cash balance plan Pages: 19 (5863 words) Published: December 10, 2012

Best Practices

Making it Personal when Conducting Provider Searches for Plan Sponsor Clients ExecutiveSummary
Selecting a service provider (provider) represents an even greater challenge than it has in the past as employer-sponsored plans become more critical in both attracting and retaining employees and in meeting the retirement planning needs of the participating employees. As more financial professionals recognize the advantages in offering retirement plan services to their clients, the need for a formal process for handling provider searches intensifies. To date, the trend has been to rely on pre-formatted online Request for Proposal (RFP) forms to solicit provider information that may ultimately undermine the intent of a search. These forms provide a good baseline to begin developing an RFP, but should be supplemented with additional questions. Each retirement plan has unique needs and specific objectives that you will need to address during the search process if you are to make the best recommendation possible. As a provider that has participated in numerous RFP searches—both single plans and multiple plans—we at Principal Life Insurance Company (Principal Life) thought it might be helpful to offer our perspective on the process based on our experience. This paper highlights the best practices we’ve found for conducting a provider search. We’ll start by identifying the steps that we believe are the key to developing an effective search process. Along the way, we’ll offer some tips for you to consider to help you develop or improve the process you and your client’s use to select a provider. This includes the creation of a customized RFP combined with activities like making a site visit. Ultimately, our objective is to assist you and your plan sponsor clients in making the best decision for their employee participants—decisions that can help participants achieve the retirement savings success they seek. By Todd Timmerman, CEBS Managing Director, The Principal Financial Group®


Best Practices: Making it Personal when Conducting Provider Searches for Plan Sponsor Clients | December 2010 | 02

Are any retirement plans just average? Are the plan participants? We don’t think so, either. Yet, many searches that rely on pre-formatted online RFP forms to solicit provider information make that assumption. While these online tools may provide a convenient starting point for a provider search, it shouldn’t be the sole information used in such a search. In fact, to find providers with the right services and solutions—not to mention the capacity to help meet a plan’s needs—the search process needs to solicit responses that relate directly to the retirement plan and the plan participants’ specific needs.

Principal Life wants to share our observations on what we believe makes a provider search more successful.

As an industry-leading retirement provider1 that has participated in numerous RFP searches, Principal Life wants to share our observations on what we believe makes a provider search more successful. In the following pages, we will examine six key steps in the process of a provider selection—covering the initial contact through the final selection—in order to identify the best practices for creating a more collaborative and more productive relationship between providers and plan sponsors, and ultimately, in achieving the desired results for the plan participants. Specifically, we will look at: • Developing evaluation criteria Building a better RFP reflective of your plan’s objectives Indentifying the candidates Conducting semi-finalist meetings Participating in a site visit Making the final selection

Our objectives are to help you develop or improve the process you currently use so that you can help your clients select a provider capable of producing the kind of results they—and plan participants—can be happy to live with for years to come.

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