Page 58 - NovDefComp

NAGDCA Conference 2019 Summary of Conference Sessions Page 3 of 8

The main take away is that, if a government plan sponsor follows a due diligence process, either variety can be
appropriate. For insurance company products, this means highlighting the risk inherent with a single insurer
though it shouldn’t automatically disqualify it from consideration, especially, if other features like key contract
provisions, the crediting rate and the financial strength of the insurance company are overwhelmingly positive.
Conversely, if a government plan sponsor selects a pooled product. The plan sponsor needs to understand the
fees, the underlying investment portfolio and the nature and quality of the underlying wrap protection and how
these contracts work together. In either case, the government plan sponsor wants to understand how the
discontinuance provision works for either type of product in case the plan sponsor ever decides to exit the
product and move to a different provider.

SUCCESSFUL COMMUNICATION CAMPAIGNS
Communication with your employees, participants and retirees is an integral component of a successful
deferred compensation program. Communication comes in many different forms – email, mail, onsite or virtual
seminars, mobile apps, and more. Creating campaigns to help participants visualize their retirement can help
employees understand the importance of saving for retirement and take action towards their goals.

Recent studies have shown that many low to mid-income employees worry about their personal finances every
day which contributes to decreased productivity. Additionally, most workers have less than $10,000 saved for
their retirement – communicating about your retirement plans and their benefits can stimulate employees to
save more, help alleviate worry, and create a positive impact on employee productivity.

Creating successful communication campaigns can be challenging – in addition to helping participants
visualize their future, campaigns must also gain trust, create a rapport, and capture their interest. Information
must also be compelling enough to stand out against many competing priorities and stimulate employees to
make changes. Keeping messages short and to the point – e.g., 60 seconds or less – can help get and keep
one’s attention.

FEES AND THE RFP PROCESS
An essential best practice for plan fiduciaries is developing and executing a successful Request for Proposal
(RFP) on a regular basis that fits the need of the governmental participants as well as conforms to entity
procurement procedures and state law requirements. Successfully selecting a recordkeeper that offers
competitive value for services, can execute a long-term contract and implement a new plan are among the
many aspects of the RFP process. Determination to select and utilize an independent consultant to assist the
government plan sponsor is often a first step.

The panelists discussed an RFP process explored Plan Sponsor Practical Considerations, Provider Response
Considerations, Proposal Evaluation and Vendor Selection and other key administrative issues. RFP Best
Practices for scoring Provider RFP responses include service model considerations, provider investment
solutions, employee demographics, and value equilibrium (e.g., features/benefits vs. price). Crucial to this
process is understanding procurement guidelines, state and federal laws, and dissecting the RFP components
such as project overview, scope of work, minimum qualifications, investment due diligence, administrative and
cost questionnaires. Developing a comprehensive RFP timeline including the additional key components of the
evaluation process, contract negotiation, transition to new provider and effective participant communication
were also reviewed. A successful RFP process includes negotiating the best fees available for services