Questions to Ask a Recordkeeper before Hiring Them 

Selecting the right recordkeeper for your company’s 401(k) plan is a critical decision. Asking the right questions can help you evaluate their expertise, services, and compatibility with your company’s needs. 

Here are some key questions to ask a recordkeeper before making a decision:

Experience and Reputation

  • How long has your company been in the recordkeeping business, and what is your experience with 401(k) plans?
  • Can you provide references from other companies with similar-sized plans and/or in the same industry?

Technology and Platform

  • What technology platform do you use for recordkeeping, and how user-friendly is it for plan participants and administrators?
  • Can you demonstrate the online tools and resources available to plan participants for managing their accounts?
  • What security measures do you have in place to protect participant data and sensitive information?

Service Offerings

  • What specific services do you provide beyond basic recordkeeping, such as plan administration, compliance support, and participant education?
  • Do you offer any additional tools or resources to help plan sponsors with plan design and management?
  • How do you handle participant inquiries and provide customer support?

Fee Structure

  • What is your fee structure, and how are fees assessed? Are there any additional or hidden fees that we should be aware of?
  • Can you provide a clear breakdown of all fees associated with recordkeeping and any other related services?
  • Are there volume-based discounts or fee reductions for larger plans?

Investment Options and Fund Lineup

  • How flexible is your platform in terms of accommodating a variety of investment options?

Compliance and Regulatory Support

  • How do you assist plan sponsors in ensuring compliance with IRS and Department of Labor regulations?
  • What compliance testing services do you provide, and how frequently are these tests conducted?
  • How do you stay abreast of regulatory changes, and how do you communicate these changes to plan sponsors?

Data Migration and Implementation

  • What is your process for migrating data from our current recordkeeper to your platform, and what support will you provide during the transition?
  • How quickly can we expect the 401(k) plan to be fully implemented and operational on your platform?
  • What resources and support do you offer to facilitate a smooth transition for plan participants?**

Reporting and Communication

  • What types of reports do you provide to plan sponsors, and how often are these reports available?
  • How do you communicate with plan sponsors regarding plan performance, participant engagement, and other relevant metrics?
  • Can you customize reports or provide ad-hoc reporting based on specific needs?

Integration with Other Providers

  • How well does your recordkeeping platform integrate with other service providers, such as third-party administrators (TPAs) or payroll providers?

Exit Strategy

  • What happens in the event that our company decides to switch recordkeepers in the future? How is data transition handled?
  • What provisions are in place to ensure a smooth transition if we choose to terminate the relationship?

Asking these questions will help you gain a comprehensive understanding of the recordkeeper’s capabilities, services, and overall fit for your company’s 401(k) plan.

Be sure to request detailed proposals, contracts, and service agreements to review and compare before making a final decision.

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