At Spay & Associates, we consistently hear three questions when companies are evaluating their 401(k):
• Where do the fees come from?
• Is there a clear process that will show us what we are getting for our money?
• Are we getting the best deal possible?
Spay & Associates uses a tool called the B3 Provider Analysis to help answer these questions and more. The B3 has the potential to reduce your current fees by live bids from competing carriers. This process places the fiduciaries in the best and strongest position to negotiate with the current provider. Additionally, the B3 Analysis satisfies a fiduciary obligation. While no law specifically requires plan fiduciaries to issue a vendor RFP and solicit bids, the process definitely demonstrates fiduciary prudence. The Employee Retirement Income Security Act (ERISA) requires plan fiduciaries to act prudently and solely in the interest of the plan’s participants and beneficiaries. Additionally, The Department of Labor, in a preamble to 408(b)(2) regulations, assumes that “plans normally conduct RFPs from service providers at least every three to five years.”
The B3 Provider Analysis is available to Spay & Associates as exclusive members of the Retirement Plan Advisory Group. It has consistently resulted in savings for both hard costs to the organization and to plan participants.