Clearing The Fog: A New Tool for Plan Sponsors

Revisiting Regulations

Considering new Department of Labor fiduciary regulations taking effect in 2017, most retirement service providers are performing a comprehensive review of their business models and strategies, including their deliverables for fiduciary services, participant-level advice, and general retirement education. It is anticipated that these changes will cause many plan sponsors to revisit their retirement plan to understand the services they are receiving better, and how providers stack up in important areas. After considering this issue, BPAS decided to create an industry tool to assist plan sponsors in evaluating these concepts.

Requests for Information

In recent years, BPAS has been responding to approximately 1,000 proposal or RFP requests each year, in conjunction with our financial intermediary partners. It might be a full RFP; a shorter Request for Information (RFI); or simply a list of questions and standard proposal request. For most DC plans under $20 million, where vendor searches are commonly performed by the plan sponsor internally, there can be much confusion over the best questions to ask.

Clearing the Fog – A New Tool

We thought this was an opportunity to help plan sponsors by coming up with a short “screening RFI” that plan sponsors can use to ferret out the key issues quickly. While different questions may favor different types of providers, the plan sponsor can use this tool at the beginning of a search process, then decide which firms to meet with further. We call this tool ‘Clearing the Fog’ – since it cuts through all the proposals and marketing spin to isolate some important, hard-hitting issues quickly.

We hope that plan sponsors will find it valuable in their process. And we also think it will be valuable to retirement service providers, to help them bid on plans more efficiently from a time perspective. After all, this is time the whole industry ends up paying for, one way or another.

Current financial intermediary partners of BPAS may access the blank version of this tool in the BPAS Partner Toolbox – see item B27. BPAS will provide a partially completed response to our partners to help them in responding to requests for this tool from plan sponsors.