RFPs and the search for a new service provider

[Guest lminsky]

I am not sure that this is the correct message board but I am posting here because it seems to receive the most traffic.

I have been asked to quarterback a client's search for a new retirement plan service provider. Has anyone out there drafted a request for proposal to be sent to plan service providers (both bundled and unbundled)? Any thoughts and/or model proposals would be greatly appreciated.

Also, any thoughts on who should receive such a request would be warmly received. The plan in question has about 500 participants and $20 million or so in assets (some of which are publicly traded employer securities). To make matters more difficult, I am only interested in high quality (lots of hand holding) low cost (no wrap fees or surrender charges) alternatives.

[LCARUSI]

If you send out a model RFP, you'll get model responses. Lots of marketing stuff and you still won't know who the best service provider is.

I suggest you spend the time to understand your client's specific requirements and then write the RFP to make sure you get specific answers concerning their capabilities.

All sponsors have different priorities concerns, and requirements.

[Guest lminsky]

I agree. I have a pretty good handle on my client's needs and wants. However, I am still looking for a model as a starting point- to see what others thought was important when they went through this process.

[Guest swodarck]

American Express Retirement Services offers a downloadable sample RFP file from their website. Go to http://www.americanexpress.com/401k/sponso...pResponse/index

or to visit their site www.americanexpress.com/401k - it's listed under the "plan sponsor" section.

The sample RFP was created by the Society of Professional Administrators and Recordkeepers (SPARK).

[Guest hadoss]

I agree, the more specific your RFP relates to your company needs the better your ability to provide the the best solution.

The SPARK RFP is excellent.

At Franklin Templeton we use the SPARK as our base response to the many RFP's we recieve each year.

As you proceed in your search Franklin Templeton would like to respond to your final RFP. We handle publicly traded employer stock, have high quality service and have no wrap or surrender charges.

Good Luck!!

[Dave Baker]

Anybody know where the SPARK RFP can be found online nowadays? American Express' site seems to have pulled it off.

[IRC401]

To me, lots of hand holding and low cost are inconsistent objectives (although you can make it low cost to the employer by subjecting the employees to lots of asset based fees).

I suggest that you take a look at the plan design and try to determine if you have bells and whistles that you don't need or have plan design features that unnecessarily complicate plan administration.

My experience has been that the people best able to respond to RFPs are the ones least able to give good consulting advice.

Why don't you consider where you would like to invest the plan's assets, and see if you can work out an acceptable arrangement with the investment organization.

Finally, beware of packaged deals. Organizations that charge asset based fees will often throw in a plan document for little or no cost. A poorly designed plan document can come back to haunt you later.

Good Luck.

[Guest]

I couldn't agree with IRC401 more. I recommend that when you conduct your search you look at the services the provider can give, including the document design and compliance work involved. My experience has been that many of the large companies spend lots of time touting recordkeeping services and investments, and very little time on the document and compliance issues...throwing them in for little or no cost.

I agree with the rest of the respondees that you want to create an RFP that answers the specific questions that are important to the plan. The sample RFP would be a good place to start, but you should really create one specific to your needs.

As a consultant in this industry, I would be more than happy to provide you with some further assistance in selecting a new service provider. Just send me an e-mail and I'd be happy to send you some names, based on your needs.

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Carol J. Ringwald

Senior Vice President

Shawmut Consulting Assoc.

[Guest kevib101]

I don't know what you people are talking about. Morgan Stanley Dean Witter has great 401(k) plans.

You do not need any special RFP for one and for two the cost and service are awesome.

[Guest]

One of the fiduciary responsibilities that a plan sponsor has is conducting a due diligent search for a service provider. Morgan Stanley Dean Witter may be a candidate for this client to look at. But to just choose them without looking at other alternatives, in my opinion, is not conducting a prudent search. There are many considerations that come into play when choosing a service provider.

The RFP process helps with that prudent search and provides a way to eliminate costly and unnecessary services that may not be needed.

[Bill Berke]

Assisting your client in this way may make you a fiduciary. Are you prepared for this? In a 1994(?) consent case the Arizona Carpenter's Union lost, the DOL published a blueprint for selecting and monitoring investment managers. The principles should apply in all fiduciary actions.

A law firm I know in Sacremento, CA is excellent and experienced in RFPs. It is Chang, Ruthenburg and Long - you can look them up in either the ASPA or NIPA directory.

[Jon Chambers]

We've written a number of articles on this topic. You may want to review them on our web site at www.schultzcollins.com. A quick suggestion--I wouldn't take this engagement if this is your first RFP management experience. A 500 life $20 million plan is too complex (particularly with all the SEC implications introduced by company stock), and the potential liability is too great. At a minimum, I'd subcontract it to someone with plenty of experience in the industry.

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Jon C. Chambers

Principal

Schultz Collins Lawson Chambers, Inc.

(415) 291-3004

[Guest lminsky]

I appreciate all of the thoughtful responses to my original post; however, the question was posted in 1998 and the issue has long since been resolved. I believe that this thread was re-opened by Dave Baker in an attempt to locate an on-line source for the SPARK RFP (apparently American Express took the RFP off its site). Thus, if anyone knows where to find the SPARK RFP on the internet please feel free to respond to Dave's query.

[This message has been edited by lminsky (edited 05-01-2000).]

[Guest guru]

contact Ronald Harrison at ronald.a.harrison@aexp.com... he is with American Express Financial Advisors...They are Awesome when it comes to retirement plans!!