1. How to Choose a Retirement Plan Provider
EXPERIENCE:
A vendor’s expertise should be a top concern. Experience that stands the test of time provides insight
regarding their ability to provide service. Retirement Plan Providers (RPP) should work with you to
ensure your plan remains compliant with changing tax laws and assists you when document changes are
desired or, more importantly, required by the IRS. It is in your best interest to select a RPP that can
design a plan based on your current needs, but also adapt to your needs as you grow. The greater the
experience, the greater the chance the RPP will;
o Understand your employees’ needs
o Adapt to constantly changing tax laws
o Cope with fluctuating markets
It is important to determine if the RPP has experience and specializes in a specific market or market
niche. You could ask the RPP the following:
 How long has the retirement plan provider (RPP) been in business?
 What type of plans does the RPP service?
o Profit Sharing
o 401(k) Deferrals
o Cash Balance Defined Benefit
o Defined Benefit
 What is the average plan size?
o Number of participants?
o Plan asset value?
 Do you offer alternative retirement options?
o IRAs
o Self Employed Pensions (SEP)
o SIMPLE 401(k)
 Do you have experience with companies similar to my own?
REFERENCES
Most Retirement Plan Providers will provide a list of references. This is a great opportunity to gather
critical information about the RPPs professional temperament. Contact references and ask questions to
gage the RPP’s reputation. Questions you might want to ask:
 Does the RPP service provide for your employees in the manner you intended?
 Are you happy with the level of professional services?
 Do you have online access to account information?
o If so, is it easy to understand and utilize?
 Did you understand the fees associated to services?
 Is the RPP available for consultation and will work with you proactively?
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2. How to Choose a Retirement Plan Provider
FEES
It is your fiduciary duty as a retirement plan sponsor to understand the fees associated to your company’s
retirement plan. When meeting with a potential RPP be certain to ask for a comprehensive fee schedule.
Total costs associated to a retirement plan can be very difficult to fully understand. It is your
responsibility as plan sponsor to ensure only reasonable and necessary fees are charged to the plan or paid
directly by the employer. It may be helpful to have the RPP walk you through this process and
demonstrate a typical plan year; showing you how fees are calculated and the frequency of invoicing as
services are rendered.
SERVICES
Obtain a written service agreement that lists services associated to your retirement plan. Review these
services with the RPP to ensure your company’s needs are met and additional services are available if
necessary. The RPP that is accessible for consultation is always preferred. A professional RPP will
always work with other professional service providers to ensure your retirement plan operates as needed.
Having your own human resource personnel meet and discuss processes with the RPP will help determine
if the RPP is an appropriate fit for your company. I always suggest outlining a “Schedule of Works” to
ensure your retirement plan is fully serviced and no service gaps exist. A sample of a “Schedule of
Works” might appear similar to the chart below.
CHART 1 – SAMPLE OF SCHEDULE OF WORKS:
PLAN RETIREMENT PLAN LEGAL INVESTMENT PAYROLL
SERVICES PROVIDER ADVISOR ADVISOR PROVIDER
 Provide document  Provide legal
services; or consultation
Plan  Work with legal  Draft an
Document adviser’s individual individual
designed document designed plan
document
 Deposit contributions  Process & submit
into participant employee elected
Contribution
accounts deferral
Deposit contributions
 Allocate contributions  Aid plan sponsor
and loan payments into to select plan
plan/participant elected investments
Investment investments  Provide employee
Election enrollment and
investment
education
 Deposit loan payments  Process & submit
into participant account employee loan
Loan
adjusting for principle payments
Payments & interest payments
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3. How to Choose a Retirement Plan Provider
CONCLUSION
Once you complete a reasonable level of due diligence and have chosen a new Retirement Plan Provider,
it is important to document the selection process. This final step will safeguard you as a plan sponsor if
the plan is ever audited by the Internal Revenue Service or Department of Labor. A reasonable and
comprehensive selection process also provides peace of mind. Your new Retirement Plan Provider will
fit with your company and allow you to confidently sponsor a retirement plan.
If you have any questions or are looking to network with a retirement plan provider, please feel free to
contact me directly. I hope you found the article helpful.
 John P. Stebbins, QKA, QPA
Goodman & Company
Supervisor
jstebbins@goodmanco.com
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