As the owner of a business that offers a retirement plan to its employees, it behooves you to periodically consider whether a different retirement plan provider would be more beneficial to your organization. Before you do extensive legwork, and certainly before you make any decisions, it’s important to formulate a game plan because no two plan providers are alike. As plan sponsor, you want to find a plan that fits your circumstances.
First things first
Before considering other providers, carefully review your current situation. Clearly identify and understand why you’re unhappy with your current plan and its services, as well as the improvements you’re looking for if you make a change.
As you draw up your evaluation criteria, find out what each of the prospective plan providers offers in terms of:
Making the conversion
Let’s say that based on your research you conclude that it’s time to make a change. Now what? Like most important decisions that impact your business and your employees, switching plan providers can be a complex process that requires some project planning:
Understand your provider’s transfer process and fees.
When you as the plan sponsor decide to transfer the plan you will be required to review and complete paperwork on your current retirement plan to share between the old and new providers. There may be surrender fees or transfer/termination fees that you may be obligated to pay in order to make the transition to a new plan provider.
Timing is everything.
While many plan sponsors look to change providers at year-end, there are benefits to making the switch midyear. Generally, year-end is the busiest time to change plans, and other plan sponsors will vie for the time and attention of your new provider. Your soon-to-be ex provider will also have their hands full with their new plan sponsors—who will likely get more attention than you, with your foot out the door. Finally, midyear may not be as busy, or crucial, a time of year for most businesses.
Keep employees in the loop.
Plan sponsors are under no obligation to consult with or get approval from employees to switch retirement plan providers. However, in keeping with the spirit of partnering in their retirement journey, it’s advisable to inform participants about the transition and set expectations about the timing and its potential impact. Sharing as much information as possible prior to the switch can lead to better outcomes on the back end.
Changing plan providers can seem like a daunting task, even if the end goal is doing what’s best for your employees and your business. However, once you’ve done your due diligence and decided to switch, having a plan in place can help ensure things run smoothly.
Integrated, trusted partner.
Corporate Payroll Services, together with PAi, offers you a payroll-integrated solution, which makes it easier for you to administer and offer the retirement benefit to your employees. Each plan sponsor is teamed up with a personal conversion specialist to work with you through each step. If you are interested in learning how a switch could save you time, money and effort, contact us today!
Actify Investor Retirements, LLC dba Corporate Payroll Services. Investment advisory services provided by Actify Investor Retirements, LLC. Actify Investor Retirements, LLC is a Registered Investment Advisor. Information presented is for instructional purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure first to consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein.
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