Oct 24, 2012 --- Arnerich
Massena has published “In Search of a Recordkeeper: Fiduciary Best Practices.” ---
The white paper discusses the need for plan fiduciaries to
select providers prudently and examines the stages of the request for proposal
(RFP) process including preparation of criteria and minimum qualifications,
construction and customization, evaluation of vendors, selection, and contract
Offering a case study of the 2012 $35.2 million judgment
against ABB Inc. for breach of fiduciary duty, the paper outlines best
practices for an organization to protect itself from similar situations. (See “Employer
to Pay for Failing to Monitor RK Costs.”) The paper illustrates how
fiduciary prudence is not a one-time decision, but an ongoing practice as plans
evolve and change, and how utilizing the RFP process to evaluate vendors is an
important aspect of that practice.
“The RFP process is designed to insure that providers offer
the optimal level of service for the price being charged. Periodically
conducting an RFP process to evaluate providers is not only a best practice to
demonstrate fiduciary prudence, but more importantly, it is in the best
interest of the participants,” said Scott Dunbar, Arnerich Massena’s managing
director of advisory services.
The benefits of the RFP process are explained in detail,
including maximizing cost savings for plan participants, providing
documentation of the execution of prudent fiduciary practice, and gathering
information useful for leverage in renegotiations.
The white paper can be downloaded from https://www.am-a.com/company/research.htm.