Is Data Valuable and How Should Committees Document Their Review?

YES, data is very valuable. Some recent court cases against institutions of higher learning's 403b plans and against Shell Oil Company highlight the stakes. These plans allegedly allowed their recordkeeping data to be used to promote non-plan services and products. It is imperative for plan committees to review and document how service providers engage with their employees.

If they are allowed to sell additional products, what benefit do those have for employees? What do they cost and how does that affect retirement plan service costs? With the advent of 408(b)(2) and 404(a)(5), plan fees are largely in the open. This is a positive as it has forced vendors to justify the fees they charge and to make sure they are commensurate with the services provided. The downside to that has been vendors trying to do more with less. Think more clients per relationship manager, increased call times, #800 service teams (man I hate those), and trying to find ways to further monetize a low margin business.

As retirement committees evaluate additional services (HSA's, Student Loan programs, Financial Wellness, 3(16) admin services, Rollover services, Managed accounts, etc.) they need to document how those services fit into their evaluation process and whether the data used to solicit these services is part of the core offering of the service provider.