High Satisfaction, but Room for Improvement

Measuring the performance of product and service providers is not an exact science. However, customer loyalty and advocacy are good indicators of performance.

These measures, used by PLANSPONSOR for its DC Survey: Plan Provider Service Ratings, show an overall high level of satisfaction with recordkeepers among defined contribution plan sponsors. The mean Net Recommendation/Promoter Score for all services measured was greater than an ‘8,’ on a scale with ‘1’ as ‘poor’ and ‘10’ as ‘excellent’.

The Importance of Plan Sponsor Service

Speaking with PLANSPONSOR, Jeff Cullen, the CEO of Strategic Retirement Partners, says, “By and large, our clients are satisfied with their current providers, and we don’t have many that are shopping.”

However, speaking about what he looks for when searching for a recordkeeper for his clients, Cullen lists “quality of service” and “true partnership philosophy” as the top two qualities. “Usually, the difference we see in individual client experience with recordkeepers comes down to the quality of people assigned to their account,” he says.

The PLANSPONSOR service ratings indicate that, overall, providers are doing well in sponsor services. The mean score for “Account/Service teams” was 8.93, though that fell below last year’s mean of 9.04. For “Plan sponsor website, reporting and tools,” the mean was 8.37, compared with 8.52 last year.

Digging deeper by looking at satisfaction scores for different sponsor markets by asset size, plan sponsor services ranked lower at the highest end of the market. Among plans with assets ranging from greater than $200 million to $1 billion, 59% of sponsors indicated they were satisfied with their provider’s plan sponsor service. This was the lowest score among all asset ranges. The second lowest was among plans with greater than $1 billion in assets.

Room for Improvement

Robert A. Massa, the managing director and Houston market retirement practice leader at Qualified Plan Advisors, says in the current state of the industry, most plan sponsors can obtain the basic services with any recordkeeper. “However, I do feel smaller employers with [the] smallest retirement plans are often quite limited in their options,” he says.

PLANSPONSOR’s analysis indicates he might be right. The lowest overall satisfaction scores for participant services and investments and fees were among plan sponsors with plan asset sizes of less than $5 million. At the other end of the market, the rating of investments and fees by sponsors of plans with asset ranges greater than $1 billion was tied as the highest, at 79%.

Key differentiators for recordkeepers often include unique participant needs, such as multi-language communication and access to advice, according to Massa.

Though there is room for improvement, the ratings show providers are succeeding in creating client loyalty and advocacy. Nearly two-thirds of plan sponsors indicated they are extremely or moderately likely to recommend their recordkeeper to a friend or colleague, and more than seven in 10 have worked with their provider for more than five years.

More findings and provider ratings can be found on the pages that follow.

—Rebecca Moore