Vendor and Plan Management

Fee Benchmarking

The Employee Retirement Income Security Act of 1974 (ERISA) requires retirement plan fiduciaries to ensure that all fees paid out of the retirement plan are reasonable in light of the services rendered. Plan sponsors are not required to purchase services from the lowest bidder, but they must be able to demonstrate a deliberative process by which the reasonableness of applicable fees is regularly considered. The topic of fee reasonableness has become a critical Department of Labor focal point since the late 2000s, making it important for plan sponsors to be able to articulate the process by which fiduciaries conclude that all plan fees are reasonable considering relevant facts and circumstances.

Multnomah Group provides plan specific fee benchmarking analysis to assist our clients in meeting the fee reasonableness standard. We use proprietary market pricing data to estimate the fee range specified in our analysis report.

Our goals in providing the annual fee benchmarking analysis to our clients are as follows:

• Assist ERISA covered clients in meeting ERISA’s fee reasonableness standard
• Assist ERISA exempt clients in maintaining a fee reasonableness best practice by providing a meaningful comparison
• Assist clients in understanding applicable plan services fees by discussing the current fee structure
• Provide a discussion springboard for related topics such as the duty to prudently monitor the plan’s vendors
• Recommend potential next steps (e.g., renegotiate service provider fees and/or service levels, launch a formal request for proposal process) depending upon where current fees fall in or out of the benchmarked range

Vendor Search

Conducting a vendor search can be a detailed, time-intensive process. If the vendor search warrants the selection of a new vendor, the conversion process requires significant planning time and may have a dramatic impact on the participant-user experience. A properly guided vendor search and implementation may result in:

• Improved service at the plan sponsor and participant levels
• Enhanced educational strategies and tools
• Better investment options
• Increased participation
• Decreased overall costs
• Increased overall participant satisfaction with the plan

Plan Design

The most crucial element of any retirement benefit plan is how successfully and efficiently it drives benefits to its participants. Multnomah Group’s consultants and subject matter specialists have a wealth of experience in designing all types of qualified and non-qualified retirement benefit and incentive programs. In our work with clients, we have found the design of the retirement plan to be the primary determinant of a plan’s effectiveness. Unfortunately, many employers choose to focus on the rate and methodology of the employer contribution, while neglecting other factors that have an equivalent impact. Features such as negative enrollment, automatic escalation, and plan leakage affect participant success as much as contribution rate and methodology. We assist plan sponsors in evaluating the design of their plan with a lens focused on all the aspects of design that impact their employee population.