Your 401(k) Recordkeeper Was Acquired or Merged. Do You Have to Stay?

Your company carefully selected a 401(k) recordkeeper.

Then something changed.

Your recordkeeper was acquired.

Two companies merged.

A familiar name disappeared.

Or you received an email announcing that your retirement plan would eventually move to a different platform.

Which naturally raises a question:

Do we have to stay?

The short answer?

Not necessarily.

But that doesn’t automatically mean you should leave either.

Recordkeeper Consolidation Is Nothing New

The retirement plan industry has seen a lot of consolidation over the years.

Recordkeepers buy other recordkeepers.

Platforms merge.

Technology gets combined.

Service models change.

Sometimes the transition is barely noticeable.

Other times, it can significantly change the experience for the employer and employees.

That’s why an acquisition or merger can be a good time to evaluate where your plan stands.

You May Have Chosen a Different Company

This is the part that’s easy to overlook.

Your company may have gone through a detailed process to select its current recordkeeper. You likely considered things like:

• Technology — Is the platform easy to use?
• Service — Will your team get the support it needs?
• Employee experience — Is it easy for employees to understand and use?
• Costs — Are the fees reasonable for the services provided?
• The relationship — Do you trust the people you’re working with?

Then that company was acquired.

That doesn’t automatically mean the new organization is a bad fit.

It simply means something has changed.

And when something significant changes, it’s worth paying attention.

What Could Change?

Every acquisition is different.

Depending on the companies involved, you could eventually see changes to things like:

• Technology
• Websites and mobile apps
• Service teams
• Participant experience
• Administrative processes
• Fees
• Available services

Or very little may change.

That’s why it’s difficult to make assumptions based simply on an acquisition announcement.

Should We Start Looking for Another Recordkeeper?

Not automatically.

Sometimes consolidation creates improvements.

A larger organization may bring additional technology, resources, capabilities, or services.

The new relationship could be an even better fit than the old one.

But sometimes the opposite happens.

Service may change.

Technology may change.

The relationship may simply stop feeling like the one you originally selected.

The important thing is to evaluate rather than react.

You Don’t Have to Wait Until Something Goes Wrong

This is where experienced retirement plan guidance becomes valuable.

You don’t necessarily need to wait for employees to complain or HR to become frustrated before looking at the relationship.

A major provider change creates a natural opportunity to ask:

Does this still work for us?

Not because you’re looking for a reason to leave.

Because your responsibility is to make sure your retirement plan continues to work well for your company and employees.

Changing Recordkeepers Is a Bigger Decision

If you decide the new relationship isn’t the right fit, changing recordkeepers is possible.

But it isn’t a decision I would make casually.

I’ve worked through a lot of recordkeeper conversions over the past decade. No two have ever gone exactly the same way.

A successful transition depends on things like:

• The outgoing provider — How smoothly will they support the transition?
• The incoming provider — How prepared are they to take over?
• The data — Is everything accurate, complete, and ready to move?
• The technology — How well will the systems work together during the conversion?
• The people involved — Is everyone clear on their role and what needs to happen?

And all of those pieces continue to evolve as technology, regulations, and the retirement plan industry change.

Experience navigating those transitions can make a significant difference.

You May Not Need to Change Anything

This is important.

A good advisor isn’t looking for a reason to move your plan.

Sometimes the best recommendation is:

Stay exactly where you are.

If the service is strong, the technology works, employees are supported, and the relationship continues to meet the needs of the company, changing simply for the sake of changing doesn’t accomplish much.

The goal isn’t movement.

The goal is making sure the plan still fits.

Key Takeaway

If your 401(k) recordkeeper was acquired or merged with another company, don’t panic.

But don’t ignore it either.

You may end up staying exactly where you are.

You may discover that the new organization offers something even better.

Or you may decide it’s time to evaluate other options.

The important thing is knowing that you have options.

Your company chose its retirement plan providers for a reason.

When one of those providers changes significantly, it’s reasonable to make sure the new relationship still serves your company, supports your employees, and makes life easier for the people responsible for managing the plan.

Sometimes staying is the right answer. Sometimes changing is. Knowing the difference is where experience matters.