I asked NewsDash readers, “When was the last time your company performed a benchmarking for providers, and did you find something that led you to make a change?”
The vast majority of respondents (84.8%) work in a plan sponsor role, while 6.1% each are advisers/consultants and TPAs/recordkeepers/investment managers. Three percent are attorneys.
Nearly half of responding readers (45.7%) reported that the last time their company issued an RFP or RFI just to benchmark a plan provider was in the past one to two years. Twenty percent reported that it was more than 10 years ago. Slightly more than 17% indicated the last time their company issued an RFP or RFI just to benchmark a plan provider was in the past three to five years, and 5.7% said it was in the past five to 10 years. “We never have” and “Don’t know” were each selected by 5.7% of respondents.
More than one-third (34.3%) said their company found something in the RFP or RFI responses that led to a change in providers, while 40% did not. For 14.3% of respondents, the question was not applicable because they’ve never benchmarked a provider, and 11.4% indicated they did not know if their company found something that led to a change in providers.
Based on verbatim comments by respondents who chose to do so, issuing an RFP or RFI is a great way to get current providers to negotiate fees. Fees were also a key factor in deciding to change providers. One respondent pointed out that aside from fees, issuing an RFP provides little opportunities to change as “It’s a lot like buying eggs.” Editor’s Choice goes to the reader who said: “I learned at the 2016 PSNC that we could be doing better… in terms of fees. We may be issuing our first RFI since 2000 in the coming year.”
A big thank you to all who participated in the survey!