Do you really need to issue a Request for Proposal to select a retirement plan? A simple of explanation of when to do it, and how to ensure its worth your while.

1. Retirement Plan RFPs:
Are They Worthwhile?

2. Ludwig, ChFC, AIF, CRPS, is an LPL
Financial adviser with LHD Retirement.
Via Employee Benefit News
article Best Practices for Retirement
Plan RFP Success
Credit
Quotes by John Ludwig

3. The bigger the plan, the more formal
the process
"Typically, in the arena of larger institutional
retirement plans, more and more smaller plan
committees are utilizing requests for proposal
processes to perform the necessary due
diligence when selecting a service provider such
as a record keeper, adviser, TPA, or other."

4. Big bang for buck
"The RFP is a time-consumptive and demanding
procedure — for both the questioner and responder.
Having both written and answered a number of RFPs,
I can attest to the depth that they can go into."
Pro: they give you lots of detail, and depth
Con: laborious process

5. RFPs through the noise
"However, I would also argue that it is one of the most
prudent ways for a plan sponsor to not only meet
their fiduciary duties under the 408(b)(2) regulation
for understanding fee 'reasonableness,'
"but also to allow them to cut through the noise of
service provider features to identify the services that
their plan and participants need."

6. Step 1: define client priorities
“The first step to an effective RFP questionnaire is
for plan sponsors to identify the unique needs of
their plan and participant pool...
“As an example, if an organization is more tech
savvy, then increased online and mobile
capabilities of the provider will be something that
should be explored.
"If the digital experience doesn’t seem to be of
importance, then why pay for a service that won’t
be utilized?”

7. Know your audience
"Understanding the role of the service
provider in question will help to direct
questions in a way that gives the most
actionable information possible.
"Always remember one of the golden rules of
writing: Know your audience.
“Ultimately, a good RFP questionnaire is
dependent on a plan sponsor understanding
the unique needs and challenges of the plan
they are charged with operating."

8. Focus on the big picture
"However, a broad understanding of the
retirement plan industry is necessary, too.
"Understand if the plan needs a service
provider to take on a fiduciary role, what sort
of investment options are available, the
different ways to fund plan expenses...
"As these questions mount, sometimes even
the simplest of RFPs can be bogged down by
their own weight."

9. Ask an expert
“Don’t be afraid to seek outside help with
the RFP project.
"An outside consultant experienced in RFP
work can make the entire project more
effective and rewarding for the organization.
"Approach the process with patience and
formula, and allow for sufficient time for all
stages of the process, from writing to
responding. And as always, work with the
end goal in mind."

10. Bottom line
Bigger plans require more formal processes
(like RFPs)
While high effort, they're high value
The help "cut through the noise" to target
solutions
RFP Issuers need to have clearly defined
the Purchasers' priorities
Effecting question writing requires knowing
your audience
Focus on the big picture & understand the
industry
Ask experts for help
*Thanks again EBN & John Ludwig for the great insight!