What to Expect When Changing Retirement Plan Providers

Changing retirement plan providers can be an arduous task.

Not only are there administrative and practical challenges, but there are a number of fiduciary obligations that plan sponsors must follow in order to comply with ERISA. Despite the numerous moving parts, a plan provider conversion can still run smoothly with an experienced advisor by your side, guiding you through the complex process and helping ensure that you are protected as a fiduciary and that your participants’ needs are being met.  In addition, simply having a solid understanding of the process itself can help you feel more comfortable and confident:

Fund Transition

Conversion to a new service provider typically requires implementation of how assets should move from the plan’s current investment menu to the menu newly constructed with the new service provider. Plan sponsors are responsible—and thus potentially liable—for participant investing, even when the plan has delegated that ability to participants and the participants have directed the investments.

Now is the time to explore concepts such as re-enrollment, understanding the fiduciary impact of QDIA default versus mapping to reasonably similar investments, and establishing a corporate retirement plan philosophy regarding investment decisions.

Efficient Investment Menu Construction

Most conversions result in slightly different, if not complete redesigns of the plan’s investment menu. Conversion offers the prime opportunity for the committee to determine the overall investment menu philosophy of the plan, taking passive versus active, behavioral finance concepts, and participant needs into consideration.

Target Date Fund Suitability Analysis

Selecting the most appropriate target date fund suite (or other QDIA) for the plan is perhaps the most important component of new plan investment menu construction. As such, it necessitates a stand-alone deep dive into elements recommended for review by the Department of Labor to determine the best “fit” for the plan.

Plan Design Review

Conversion to a new service provider often requires a new plan document. As a result, the conversion is an ideal opportunity to review your plan’s provisions to ensure they reflect your organization’s ideals, desired plan impact, and financial capabilities. Not all providers can recordkeep all plan provisions, so this review is dually vital to ensure unnecessary administrative burden is not created with any changes.

Communication Campaign

Conversion of the plan should be an exciting time for plan participants, but it can be confusing if not handled appropriately. Conversion is a time to get your participants excited about new design, better costs, more services and/or a new and improved investment menu. Constructing and implementing a robust and well-messaged communication campaign is a must.


The service provider and payroll company work together to test contribution remittance files to ensure compatibility between both companies’ processes for payroll codes and census data.

Participant Education

Choose the timing of education wisely, and whether it is delivered in person or via webinar. Education should cover what’s changing, what (if anything) employees need to do during this process, and a general timeline of when the changes will occur. Oftentimes, a demonstration of the new provider’s website is extremely valuable for participants.  A plan provider conversion offers fiduciaries a unique opportunity to help improve the retirement outcomes of employees, so it is important to take full advantage of this opportunity!

Securities and investment advisory services are offered solely through registered representatives and investment advisor representatives of Ameritas Investment Corp. (AIC), a registered Broker/Dealer, Member FINRA/SIPC and a registered investment advisor. AIC is not affiliated with Summit Group of Virginia LLP. Additional products and services may be available through Summit Group of Virginia LLP that are not offered through AIC. Representatives of AIC do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

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