If you are considering changing your 401k plan vendor, then there are a number of questions you should ask, and also a number of areas you should cover before going ahead.
The key areas you should consider are the following:
Service:
• Make sure that your account representative operates from an office close by, and not some 3 states away. Don’t forget that it is easier to arrange for participant educational seminars when the provider is close by.
• Ask about call centre hours, and what service they will be able to offer you
• Is there any web support and how user friendly is it?
• Make sure that the paperwork such as the statements that participants get, as well as your reports suit your needs and are easy to go through
• Confirm the regularity of retirement distributions
• Confirm the efficiency with which contributions, as well as transfers are recorded.
Compatibility:
Ask for references for plan sponsors of similarly sized plans, who have had positive and negative experiences with the provider you are looking at. Remember that not all the providers are suitable for a small plan, where the sponsor might need more service.
Fees:
401k plan fees may be calculated in various ways such as the number of participants, the amount of plan assets, execution of transactions and you may also have fixed charges. See what works best for you and your participants.
Compliance:
Confirm that the charges relating to compliance with the IRS regulations are built into the base of the new plan. In the case that there are no extra costs, you are better off asking your accountant to handle the situation.
Blackout Periods
We all know that balancing all the accounts takes its fair share of time. However you should always ask for a reasonable estimate of how long the blackout period will last.
Reference: http://www.401khelpcenter.com/changing_vendors.html
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