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Due Diligence Service

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Due Diligence Service document sample

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									401(k) Due Diligence Service
          Legal Obligations Under ERISA
  Excerpts of White Paper by Reish Luftman Reicher & Cohen

1. ERISA creates obligation [by Sponsors] to:
       prudently select and monitor the providers of investments and
      services
      understand and evaluate the expenses charged for those
      investments and services
      monitor the investments and service providers on an on-going
      basis
      conduct an “independent investigation,” a quantitative and
      qualitative analysis of what their plan is currently providing
      compared with what is available in the marketplace…
2. ERISA requires fiduciaries to turn to outside assistance for help
   when they are unable to perform the functions themselves
3. The 401(k) Due Diligence Service assists fiduciaries in fulfilling the
   procedural prudence requirement enables the fiduciaries to fulfill
   their ERISA responsibility
                                                                            2
How the Due Diligence Service Can Help
          SPONSOR PROBLEM                                        DUE DILIGENCE SERVICE
1. ERISA requires Plan Sponsors to make sure that     1. Plan fees are fully detailed in Section 1 including asset
plan expenses are reasonable                          based and record keeping charges
2. To ensure that expenses are reasonable, Sponsors   2. Fees are compared to industry averages compiled from
have to know market pricing and exactly how           6,000 RFP’s and 3 live bids from appropriate competitors in
much they are paying their current Provider           Secion. 1
3. Plan Sponsors do not have the knowledge or         3. Fees are broken out by how much each party gets paid
ability to get market pricing nor understand how      including the Record Keeper, Investment Managers, Advisor
much their Provider is receiving esp. from 3rd        and Broker Dealer (if applicable) in Section 1
parties
4. Sponsors need to know if their Provider is well    4. All top Providers are rated and compared in Sect. 4; a
rated, suited for their plan and committed to the     profile of each Provider along with their client loyalty,
401(k) market                                         including what % are searching. is provided in Section 2
5. Sponsors need to know if their retirement plan     5. Record keeping and plan administrative services are
needs improvement or updating                         detailed in Sect. 3; other like plans are profiled in Sect. 5
6. Sponsors need to monitor funds and compare         6. All funds returns, expenses and risk elements are
returns and expenses to market averages               compared to applicable benchmarks in Sect. 6
7. Local advisors do not have access to national      7. 401kExchange and the Boston Research Group, nationally
databases and national advisors are tainted by        recognized market research and intelligence experts, do not
payments from Providers                               receive any additional compensation from Providers for this
                                                      service                                                 3
 Who are 401kExchange and the Boston
           Research Group?
          401kExchange                  Boston Research Group
Since 1996, 401kExchange has       Since 1999, leading 401(k)
   helped thousands of Plan           Providers have relied on the
   Sponsors and their Advisors        Boston Research Group’s
   conduct periodic Due               syndicated market research
   Diligence using proprietary        studies with Plan Sponsors
   databases and web based            and Advisors to determine
   services to review:                their competitive strengths and
1. Record Keeping Capabilities        weaknesses including:
2. Plan Administrative Services    1. Satisfaction Ratings of over 30
3. Fees                               Providers in 13 categories
4. Funds                           2. Demographic profiles from
                                      over 3,000 plans each year
5. Corporate Capabilities
(See representative client list)
                                   (See representative client list)

                                                                      4
Due Diligence Service Overview

Preface: Due Diligence - Background and Methodology
Section 1: Plan Expenses
Section 2: Competitive Comparisons
Section 3: Provider Services Comparison
Section 4: DCP Satisfaction Comparisons
Section 5: Market Profiles
Section 6: Fund Performance Review




                                                      5
Table of Contents

 Section 1: Plan Expenses                     Section 2: Competitive Comparisons
         — Current Investment Returns         (Continued)
         — Average Expense Ratios                     — Company Stock
         — Investment Expense – Incumbent             — Satisfaction with Broker
            Provider                                  — Relationship Manager Satisfaction
         — Investment Expense – Industry              — Client Loyalty
            Average
                                                      — Client Recommendations
         — Investment Expense – Provider A
         — Investment Expense – Provider B            — Client Attrition
         — Investment Expense – Provider C    Section 3: Provider Services Comparison
         — Record Keeping Rates                       — Record Keeping Features
         — Breakdown of Annual Fees                   — Service Standards
         — Record-Keeping & Investment Fees           — Documents, Testing & Trust
         — Who Is Compensated?                        — Internet & Interactive Voice
 Section 2: Competitive Comparisons                      Response Systems
         — Overview                                   — Participant Education Services
         — Investment Availability
         — Size of Plans Under Management
         — Participation Rates
         — Matching Contributions
         — Client Asset Allocation

                                                                                        6
Table of Contents (Continued)


 Section 4: DCP Satisfaction Comparisons         Section 4: DCP Satisfaction Comparisons
         — Overall Satisfaction – Incumbent v.   (Continued)
            Market v. Plan Sponsor                      — Satisfaction With Proprietary
         — Overall Satisfaction – Market                   Investment Performance – Market
            Overview                                       Overview
         — Satisfaction With Broker -                   — Satisfaction With Relationship
            Incumbent v. Market v. Plan                    Manager – Market Overview
            Sponsor                                     — Satisfaction With Plan Coordinator
         — Satisfaction With Broker – Market            — Satisfaction With Plan Coordinator
            Overview                                    — Market Overview
         — Satisfaction With Educational
            Services - Incumbent v. Market v.    Section 5: Market Profiles
            Plan Sponsor
         — Satisfaction With Employee                   — Purchase Channel
            Educational – Market Overview               — Plan Service Staff
         — Education Advice and Guidance                — Proprietary Investments
         — Satisfaction With Relationship               — Number of Investments
            Manager                                     — Client Advocacy
         — Satisfaction With Proprietary                — DB Plans
            Investment Performance
                                                 Section 6: Fund Performance Review




                                                                                           7
Due Diligence: Background
Overview
  It is difficult, if not impossible, for a Plan Sponsor to conduct meaningful due
  diligence about their 401(k) plan, provider and investments without the help
  of an industry professional.
     Most industry professionals, whether regional or national consultants, do not have access to
     the industry accepted objective and subjective tools and databases to analyze the major
     providers and their services, especially their back office services. Though their investment
     analysis may be very good, their other due diligence services can be limited and expensive
     because they rely on proprietary studies and in-house consultants paid by the hour.

  401kExchange and the Boston Research Group have partnered to create
  the 401(k) Due Diligence Service to help plan sponsors quickly evaluate the
  quality of their plan, provider and investments as well as a detailed analysis
  of all costs.



                                                                                                    8
Due Diligence: Methodology

The Process
  With their industry accepted Defined Contribution Plan Sponsor Study
  (DCP), the Boston Research Group has developed a system of extensive
  research and online databases to analyze which providers have the best
  satisfaction performance overall in 13 service categories. This study is
  proven to be the industry benchmark of satisfaction ratings with the top 15
  service providers paying $50,000 each to receive the study and evaluate the
  quality of their services relative to key competitors.
  401kExchange has developed the 401(k) industry’s only independent
  directory of all providers that details all services, features and investment
  options. Additionally, 401kExchange has created an electronic interface
  with service providers to gather real time, customized pricing proposals.


                                                                                  9
Due Diligence: Methodology
The Process (Continued)
  The resources of the Boston Research Group and 401kExchange
  combine for a powerful due diligence service that plan sponsors use to
  evaluate the quantitative and qualitative elements of operating their
  retirement plans.
     All fees charged by the incumbent provider, including administrative and investment costs are
     detailed and analyzed. This analysis includes any revenue sharing reimbursements received
     by the record keeper from the mutual fund companies.

  The study compares the fees and services of the incumbent provider to
  those of three top competitors.
     Other objective information such as the percentage of company stock, participation rates and
     asset allocation are reviewed and compared.
     Complete investment returns and expenses are analyzed using Zephyr’s state of the art
     analytical tools.



                                                                                                10
Due Diligence: Methodology
The Process (continued)
  The end result is a report which gives the 401(k) plan sponsor a
  comprehensive analysis of their current plan, provider and investments as
  compared to the market and three relevant service providers.
  Principals from 401kExchange and the Boston Research Group will
  personally review the results of the Report with senior management of the
  plan sponsor and make appropriate recommendations.
  Plan sponsors can use this report and consulting services to fulfill their
  fiduciary responsibility under ERISA to ensure that expenses the relative
  quality and costs of their current provider compared to the competition are
  reasonable, and determine whether they need to re-negotiate with their
  current provider, adjust services or conduct a comprehensive search for a
  new vendor.


                                                                                11
Due Diligence: Methodology - Investment Analysis

 The investment analysis section of this study enables a plan sponsor to
 evaluate the fund investment options within their current plan by specifically
 comparing the fund to an appropriate benchmark in the following areas:
     Manager Performance: Manager Performance illustrates the absolute and relative performance of the
     managers in the analysis. It shows the growth of a dollar invested in the manager's portfolio and the
     benchmarks.
     Manager Style History: A manager’s style history, and the consistency with which a manager has stayed
     within a specific style, gives an investor a lot of information about how that manager might fit into a larger
     portfolio. Financial advisors and plan sponsors, for example, generally prefer style consistent managers
     because they feel they can project with more certainty the manager’s future style.

     Manager vs. Universe: Universe Rank makes it easier to see where the managers fall in relation to the
     universe over time.

     Manager Return Ranking: Keep tabs on the performance of managers by viewing monthly, quarterly,
     calendar annual, cumulative annual returns.

     Excess Returns: The difference between the cumulative return of the manager and the cumulative return of
     the benchmark.


                                                                                                                      12
Sample Report Pages




                      13
        Sample Report Page: Plan expenses
                                          Annual Fee Breakdown
                                        Incumbent         Industry         Sample            Sample            Sample
Description
                                         Provider        Standard         Provider A        Provider B       Provider C

Investment Expenses                      $406,220         $561,245         $279,015          $498,281         $525,285
   - Investment Manager Fee 1            $274,746         $364,809         $166,323          $359,294         $283,871
   - Broker - Dealer 12(b)(1) Fee 2      $93,910          $140,311          $93,910          $93,910           $93,910
   - Provider 12(b)(1) Fee 3                $0               $0                $0               $0            $105,057
   - Sub-Transfer Agency Fees 4          $37,564          $56,124           $18,782          $45,077           $42,447
   - Additional Placement Fees 4            $0               $0                $0               $0               $0
Total Investment Fees Paid               $406,220         $561,245         $279,015          $498,281         $525,285
+ Record Keeping Fees to
   Provider                              $15,760          $38,685           $40,400          $35,625           $24,175
Total Annual Expenses                    $421,980         $599,930         $319,415          $533,906         $549,460
1 - Fees paid to Investment Manager for portfolio management.
2, 3 - Fees paid to plan fiduciary to provide ongoing education and investment advice. In the case of the "Broker /
Dealer", this fee would be split between the two parties.
4 - Fees paid to plan record keeping provider to offset costs associated with administering participant accounts.



                                                                                                                      14
        Sample Report Page: Plan expenses
Eligible Employees              985

Plan Participants               690

                               Record Keeping & Investment Fees
                                Incumbent     Industry       Sample         Sample          Sample
Description
                                 Provider    Standard       Provider A     Provider B     Provider C
Installation Rate                     NA        $895          $2,000           $0              $0
Conversion Rate                       NA       1,050          $2,000         $1,000          $2,000
Annual Base Rate                  $5,000       $1,475         $2,000         $1,000          $2,000
Per Eligible Rate                     NA      $63,640        $34,400           NA              NA
Average Per Participant Rate     $10,760      $36,315           NA          $33,625         $20,175
Total Record Keeping             $15,760      $38,685        $40,400        $35,625         $24,175
Investment Expenses              $406,220     $561,245       $279,015       $498,281        $525,285
Annual Plan Fees                 $421,980     $599,930       $319,415       $533,906        $549,460


Annual Cost Savings                   NA    ($177,949.81)   $102,565.09   ($111,926.28)   ($127,480.03)




                                                                                                       15
 Sample Report Page: Plan expenses

                                   Who Is Compensated?

                 Incumbent                                                                    Sample Provider
                                  Industry Standard   Sample Provider A   Sample Provider B
Description       Provider                                                                          C


                                                                                              Amou
               Amount        %    Amount       %      Amount       %      Amount      %                 %
                                                                                                nt


Investment                                                                                    $283,8
Manager        $274,746   0.73%    $364,809   0.97%    $166,323   0.44%   $359,294    0.96%      71     0.76%
                                                                                              $75,12
Broker          $75,128   0.20%    $112,249   0.30%     $75,128   0.20%    $75,128    0.20%        8    0.20%
                                                                                              $18,78
Dealer          $18,782   0.05%     $28,062   0.07%     $18,782   0.05%    $18,782    0.05%        2    0.05%

Record
Keeping                                                                                       $66,62
Provider        $53,324   0.14%     $94,809   0.25%     $59,182   0.16%    $80,702    0.21%        2    0.18%


Total Annual                                                                                  $444,4
Compensation   $421,980   1.12%    $599,930   1.60%    $319,415   0.85%   $533,906    1.42%      03     1.18%



                                                                                                       16
              Sample Report Pages: Competitive
                       Comparisons
                                    Incumbent                   Industry
Description                                                                              Alternate Provider and Product Name
                                     Provider                  Standard
                                   Sample Provider -                                                                            Sample Provider
Provider Name                                                       NA                Sample Provider A    Sample Provider B
                                      Incumbent                                                                                       C

                                                                                                                                  Provider C
Product Name:                      Incumbent Product                NA                Provider A Product   Provider B Product
                                                                                                                                   Product

Provider Net Satisfaction % *             88%                       93%                      95%                  90%                91%

                                                          Alliance=3%,Bundled=4
Product Category:                       Bundled            1%, Unbundled=11%,             BUNDLED             Un-Bundled           Bundled
                                                           Various Types=45%

401(k) Plan Assets                  $13,500,000,000                 NA                $476,000,000,000      $27,500,000,000     $8,400,000,000

Years in Industry                         11.0                      NA                       16.0                 23.0               23.0

Average Client Tenure - Years              5.2                      6.7                       6.0                 8.2                 5.6

Average Plan Assets                   $21,000,000              $110,000,000              $168,000,000         $29,000,000        $47,000,000

Average Plan Employee Size               1,050                     5,500                     8,400               1,450              2,350

* Net Satisfaction: Percentage of respondents indicating either "Very Satisfied" or "Somewhat Satisfied"




                                                                                                                                            17
          Sample Report Pages: Competitive
                   Comparisons
                         Client Would Recommend Provider

                    Incumbent      Industry       Sample       Sample        Sample
Description
                     Provider      Standard      Provider A   Provider B   Provider C

Yes                   51%            61%            64%          66%          87%

No                    49%            39%            36%          34%          13%


                            Quality of Recommendation

                    Incumbent      Industry       Sample       Sample        Sample
Description
                     Provider      Standard      Provider A   Provider B   Provider C

NET: Likely           83%            92%            96%          93%         100%

Very Likely           60%            56%            65%          53%          77%

Somewhat Likely       23%            35%            31%          41%          23%

Somewhat Unlikely     17%             5%            2%           4%           0%

Very Unlikely          0%             2%            2%           2%           0%

NET: Unlikely          0%             1%            1%           0%           0%



                                                                                    18
      Sample report pages: Competitive
               comparisons
              Currently Searching For New Provider

              Incumbent     Industry    Sample       Sample        Sample
Description
               Provider    Standard    Provider A   Provider B   Provider C

Yes              0%           5%          2%           4%            3%

No              100%         95%          98%          96%          97%



              Considering a Search For New Provider
                            Industry   Sample
              Incumbent                              Sample      Sample
Description                 Standar    Provider
               Provider                             Provider B Provider C
                                d          A

Yes              15%           7%         5%           10%           4%

No               85%          93%         95%          90%          96%




                                                                          19
           Sample Report Pages: Competitive
                    Comparisons
                              Company Match

                  Incumbent     Industry       Sample       Sample        Sample
Match %
                   Provider    Standard       Provider A   Provider B   Provider C

No Match            13%          20%            13%           17%          7%

100%                 2%           3%             1%           0%           3%

Less than 3%        18%          32%            19%           21%          23%

3%                  24%          13%            25%           29%          20%

4%                  11%           5%            10%           7%           17%

5%                   5%           8%             5%           3%           0%

6%                   7%          11%             5%           9%           20%

Greater than 6%     10%           8%             8%           5%           0%

Other/Varies        11%           0%            14%           9%           10%



                                                                                 20
      Sample Report Pages: Provider Service
                 Comparisons
                                                        Service Standards

                                                          Industry                              Sample Provider   Sample Provider
Description                     Incumbent Provider                       Sample Provider A
                                                           Standard                                     B                 C

                                                       13.5 Business                                              Within 15 Business
Statements :                     5 Business Days             Days        10 Calendar Days           7 Days                Days
                                                                         Invest upon recpt of
                                                                             assets in good
Investing Contributions :           Same Day         1.2 Business Days            order            24 Hours            48 Hrs
Allocate Earnings :                 Same Day         1.6 Business Days           Daily             24 Hours          Same Day
Participant Distributions :       1 Business Day     7.1 Business Days   5-7 Business Days         24 Hours       2 Business Days
Participant Confirmations :           24 Hrs         2.4 Business Days      3 Business Days        48 Hours       2 Business Days
                                   90% Within 30
Phone Operator Pick-up Rate :          second            2.5 Rings              2 Rings            2-3 Rings           2 Rings
Phone Operator Drop Rate :            1.05%                <2%               Less than 1%            3%                  2%
                                   90% Within 30
Phone Operator Hold Rate :             second           48 Seconds            20 Seconds              NA             30 Seconds
                                                                            Adhoc reports via                      15-20 Business
Plan Sponsor Reports :           10 Business Days    8 Business Days           the Internet         7 Days               Days
Form 5500 Completion            100 Days after Y/E        Varies            By IRS Deadline          Yes              90 Days
                                                         Yes=87%,
Clients Visits :                       Yes                 No=13%                 Yes                Yes               Annual




                                                                                                                              21
          Sample Report Pages: Provider
             Service Comparisons
                                     Participant Education Services


                             Incumbent             Industry        Sample       Sample         Sample
Description
                              Provider            Standard        Provider A   Provider B    Provider C

Web Based Investment                             Yes=86%,
                               Yes                                    Yes         Yes           No
Advice                                           No=14%
                             Standard &
Provider Name :                                     NA            Provider A   Morningstar   Provider C
                               Poor's
                             Standard &
Provider Rate :                                     NA            Provider A   Morningstar   Provider C
                               Poor's

Web Based Asset Allocation                      Yes=53%, No
                               Yes                                    Yes         Yes           Yes
Software :                                         47%

                                                Yes=86%, No
Video :                        Yes                                    Yes         Yes           Yes
                                                   14%

Group Meetings :               Yes           Yes=99%, No=1%           Yes         Yes           Yes

                                                 Yes=62%,
One-on-one Meetings :          Yes                                    Yes         Yes           No
                                                 No=38%




                                                                                                      22
Sample Report Pages : DCP Satisfaction
           Comparisons
    Satisfaction With Educational Services Provided by Record-Keeper
                         Incumbent v. Market v. Plan Sponsor



                                                                              500 - 999 EEs
                                                 44%                          Your Provider
  Very Satisfied
                                    25%

      Somewhat                                    45%      Your score
       Satisfied                                 44%

Neither Satisfied        8%
nor Dissatisfied              17%

     Somewhat       3%
                              15%                               Q4.2 “Overall, how satisfied is your
     Dissatisfied                                               company with the employee
                                                                education services provided by your
                    1%                                          plan’s record-keeper?”
Very Dissatisfied   1%



                                                                                                 23
  Sample Report Pages : DCP Satisfaction Comparisons


               Satisfaction with Employee Education

                                --   100
                                --
                                --   95
                                --
                                --
                                --   90
                                --
                                --
                                --   85
                                --
                                --
                                --   80
                                --   75
                                --
                                --
                                --   70
                                --   65
                                --
                                --
                                --   60
                                --   55
                                --
                                --
                                --   50
                                --   45
Norm                            --
                                --                     Norm
                                --   40
                                --   35
                                --
                                --
                                --   30
                                --   25
                                --
                                --
                                --   20
                                --   15
                                --
                                --
                                --   10
                                --
                                --    5
                                --
                                --
       Q4.2
                                                      24
Sample report pages: Market profiles
Percent of Assets in Your Record-Keeper’s Proprietary Funds/Investments

                                                 39%
        500-999 EEs


                                                                 68%
             All Plans


                                         24%
      Your Provider


                         0%        20%        40%       60%        80%       100%

                                   Your Answer: 70%

Q13.1a “Approximately what percentage of your plan assets are in your plan’s record-keeper’s
proprietary investment options?



                                                                                               25
Fund Performance Review




                          26
                       Representative Client List

ABN Amro           CitiStreet         MassMutual              T Rowe Price
                   Diversified Inv.
ADP                Advisors           McDonald Investments    Transamerica

AIM                Fidelity           Merrill Lynch           Travelers

AMVESCAP           Goldman Sachs      MFS                     Union Bank of California

AUL (OneAmerica)   Great West         Morgan Stanley          US Bank

Bank of America    J P Morgan         Nationwide              Vanguard

BISYS              John Hancock       New York Life           Wachovia

Morningstar        Legg Mason         Prudential Retirement   Wells Fargo

Ceridian           Lincoln            Putnam
                                      Standard Insurance
Charles Schwab     Lord Abbett


                                                                                    27
             Representative Client List
AARP                        MFS
ADP                         Principal Financial
Bank of America             Prudential Retirement
Barclays Global Investors   Putnam Investments
Charles Schwab              Scudder
Federal Reserve Bank        Securities Industry Association
Fidelity Investments        T. Rowe Price
ING                         The Vanguard Group
Investment Company
Institute                   TIAA-CREF
JP Morgan                   US Bank
John Hancock                Wachovia
MassMutual



                                                              28
Fred Barstein, CEO
Fred Barstein is President, Chief Executive Officer and founder of 401kExchange. Founded in 1996,
401kExchange has become the leading business development and market intelligence provider for the 401k and
retirement industry serving the small and mid-sized corporate market. Using a proprietary call center and web-
based technology, 401kExchange helps connect Plan Sponsors with experienced Retirement Advisors and Service
Providers that focus on this market segment. By identifying sales opportunities and providing competitive
intelligence using integrated web-based tools to Providers and Advisors, 401kExchange makes the current market
distribution system more efficient while better serving the needs of the Sponsor. Based in Palm Beach County,
Florida, the company employs 60 full time professionals, half in the call center.

Mr. Barstein is an attorney, was a member of the American Bar Association and the New York State Bar. He
received his Bachelor of Arts Degree, cum laude, in History from Boston College and his Law Degree from Cardozo
School of Law in New York. He a member of TEC (The Executive Committee), an international organization of
CEOs and is a regular speaker before various TEC groups throughout the country. He speaks regularly at
Retirement Industry and E-Commerce Conferences around the country and internationally and is quoted widley in
indsutry publications as well as the Wall Street Journal and New York Times.



Warren Cormier, President
Warren Cormier is founder and President of Boston Research Group. He has more than twenty years of
quantitative and qualitative experience in financial services research for investment companies (both retail and
institutional clients), banks, and insurance companies. This work has included projects that focus on strategic
marketing issues, market segmentation, product development, customer satisfaction, distribution issues,
competitive assessments, and marketing communications. In this work, he has developed an expertise in the
design and analysis of market research studies and in providing marketing consulting to clients. He has served as
Director of Research for both Shawmut Corporation and Bank of Boston and was a partner at Temple, Barker &
Sloane (now Mercer Management).


                                                                                                                    29
   Legal Obligations Under ERISA – Legal White Paper

Reish Luftman Reicher & Cohen, the premier ERISA law firm in the country, recently published
  a white paper in response to the 401kExchange Boston Research Group Due Diligence
  Report which states, in part (full text available upon request):

Under the Employee Retirement Income Security Act of 1974 (ERISA), fiduciaries have an obligation
     to prudently select and monitor the providers of investments and services for their retirement
     plans, to understand and evaluate the expenses charged for those investments and services
     and to monitor the investments and service providers on an on-going basis.…To fulfill that
     responsibility, the fiduciaries must conduct an “independent investigation,” a quantitative and
     qualitative analysis of what their plan is currently providing compared with what is available in the
     marketplace…
It is difficult, without the assistance of industry professionals, to accumulate the breadth of knowledge
     and information, especially qualitative information, required to do a proper evaluation. The due
     diligence obligation is not lessened in the face of this difficulty…For this reason, ERISA requires
     fiduciaries to turn to outside assistance for help when they are unable to perform the functions
     themselves…
The 401(k) Due Diligence Service offered by 401kExchange.com, Inc. assists fiduciaries in
     fulfilling the procedural prudence requirement to gather and evaluate the in-depth data required
     to conduct prudent selection and monitoring…Fiduciaries who use the Service receive a detailed
     report comparing their plan’s current provider with three other relevant providers in the marketplace.
     This report enables the fiduciaries to fulfill their ERISA responsibility to know and evaluate the
     relative quality and costs of their current provider compared to the competition – whether
     they are reasonable – and to determine whether they need to re-negotiate with their current
     provider, adjust services or conduct a comprehensive search for a new vendor.

                                                                                                        30

								
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