DC Plan Termination Video Series Part 3: Five Criteria for Selecting a Services Provider

Retirement Clearinghouse (RCH) is pleased to offer a three-part series of educational videos on plan terminations, presented by Mike Wilder, RCH’s Senior Vice President, Strategic Accounts. These videos are intended to provide plan sponsors with a basic understanding of key plan termination process steps, the common mistakes that are made by plan sponsors, and the key criteria for selecting a plan termination services provider. We hope you’ll find these videos interesting & informative!

DC Plan Termination - Five Criteria for Selecting a Services Provider

Terminating a retirement plan takes a lot of work, a lot of planning and requires specialized skills.  Not surprisingly, most fiduciaries choose to outsource plan terminations to service providers.

Selecting an outsourced provider is a critical decision. To help simplify the process we suggest using the five criteria below.

#1 – Deliver a full range of services including:

• Mailing of required participant notices
• Participant address verification
• Multi-lingual call center support for responding participants
• Safe Harbor IRAs for unresponsive participants

#2 – Have expertise in locating missing participants

The DOL is very specific about what is required if a participant is deemed to be “missing”. When selecting an outsourced provider make sure they have a proven track record of fulfilling those requirements including:

• Verification of/updates to participants’ last best-known address
• Locating beneficiaries of deceased participants
• Utilization of multiple web-based resources
• Oversight of USPS Certified mailing
  
  

#3 – Focus on minimizing cash outs and promoting account consolidation

Unfortunately many participants will be tempted to cash out their retirement savings during a plan termination.

To help reduce cash outs and increase retirement account consolidation to an existing account, like a new employer’s plan, make sure the provider has professionals who will provide distribution counseling.


#4 – Offer fiduciary-friendly Safe Harbor IRAs and on-going account support

• Continuous efforts made to locate missing account holders
• Straightforward, easy-to-understand fee structure
• Monthly account maintenance fee vs. annual fee
• No lock-up provisions
• Ability to move assets to more suitable investment options
• Account consolidation assistance
  
  

#5 – A proven track record in facilitating plan terminations:

• How long they’ve handled terminating plans
• The number of terminating plans they’ve worked with
• The mix of large vs. small plans
  
  

Working with the right plan termination service provider can alleviate a lot of headaches and save a lot of time. To learn more about the plan termination services of RCH call 866.827.9608 or email sales@rch1.com.

Previous video: Common Mistakes Plan Sponsors Make (part 2 of the three-part series)