Are You Due for a Provider Check-up?

In fact, for mid-size and large programs, they were about twice as likely to undertake that review every three to five years, a frequency that also was most commonly cited by the largest programs, according to the 2010 PLANSPONSOR Defined Contribution Survey.  Those review timelines help explain why more than half of this year’s respondents in the mid-size, large, and “mega” categories had been with their current DC provider more than seven years—and why, even in the micro segment, a full third had a relationship that was more than seven years old as well. 

But if a full service review was something of an infrequent event, not so fees.  More than half of this year’s survey respondents said they review fees annually; and the larger the program, the more likely to conduct that annual review.  That finding was, however, down slightly from a year ago. 

As for the elements of that provider review, overall participant servicing remained top of mind for plan sponsor respondents, a sentiment that intensified as the programs grew in size.  Overall sponsor servicing was second most important, with the quality of the client service team not far behind, and cost/fees just behind that.

And – notably – more than a quarter (26.6%) of plan sponsor respondents admitted they didn’t know the approximate average expense ratio of the investment options in their plan, though that number ranged from 36% at the smaller programs to nearly one-in-ten at the largest plans.

As for future action plans, in view of the changes just past, and those that loom ahead, one might contemplate any number of responses.  However, that most commonly cited by plan sponsors in this year’s survey, and by a significant margin, was the intent to increase participant education and/or content.