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As a Fiduciary, what should I be looking at in selecting a plan service provider? DOL provides the following guidelines:
Hiring a service provider in and of itself is a fiduciary function... Some items a fiduciary needs to consider when selecting a service provider include:
- Information about the firm itself: financial condition and experience with retirement plans of similar size and complexity;
- Information about the quality of the firm’s services: the identity, experience, and qualifications of professionals who will be handling the plan’s account; any recent litigation or enforcement action that has been taken against the firm; and the firm’s experience or performance record;
- A description of business practices: how plan assets will be invested if the firm will manage plan investments or how participant investment directions will be handled; the proposed fee structure; and whether the firm has fiduciary liability insurance.
- An employer should document its selection (and monitoring) process, and, when using an internal administrative committee, should educate committee members on their roles and responsibilities.
Beneco has prepared a Bio which addresses items A and B above. To compare us to another vender with regards to C above, ask both Beneco and the other provider for the investments that will be utilized in the plan. Also ask all parties to complete the Department of Labor’s form for evaluating fees. You will need to make sure that all parties are given the data on the number of participants, the anticipated loan activity, contribution activity, and distribution activity as well as the current investments held by the plan.
Benesystems provides all of its clients with a Record Keeping Agreement which spells out all record keeping and contracted administration fees done for the employer. Beneco has a Client Services Agreement that spells out all client services provided by Beneco and all fees charged for those services. We want all of our clients to be sure they comply with the Prudent Man Rule when checking out any plan and getting all your questions answered correctly and accurately and put in writing. We are confident that when you look at the additional fiduciary protection, that you will see the true value for the fees paid under the Beneco Plan.
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