Plan Sponsors, Are You Leaving Important Questions Unanswered?

As some of my readers know, I am a huge fan of the Ford Mustang.  I have owned several, my dad has had a few, and I love them.  But the Mustang was almost seriously compromised in the 1980s.  In response to the 1979 fuel crisis, Ford was going down a path to replace the existing real wheel drive Mustang chassis.  They were considering a joint Ford-Mazda platform that drove the front wheels and offered a choice between four and six-cylinder engines.  It was all very well-thought-out and logical, and was what they thought consumers wanted.

Ford didn’t know it yet, but that would have been a disaster.  The marketers hadn’t thought to ask the question about the more personal, emotional, experiential side of things, and perhaps they were even asking the wrong folks.  Fortunately for Ford, car enthusiasts caught wind of this and told Ford they’d never speak to them again if they ditched the Mustang’s optional V8 and rear wheel drive, gutting it of its all-American, git-r-done attitude.  Thankfully, Ford saw that they were messing with something that had become very personal to enthusiasts over the years, and the Mustang was permitted to carry on, more or less as-is.  The new platform was still introduced in 1988, as a different car altogether – the Ford Probe, a successful car in its own right.  But the Probe was scrubbed from the Ford lineup nine years later, and the Mustang has forged ahead for more than two decades since, today in many ways better and more successful than ever.

What would have happened if the motorheads had not intervened, and pointed out that Ford was leaving some important questions unanswered?  And what would have happened if Ford had pushed ahead anyhow, and tramped all over the Mustang’s decades-old fan base?  Why do I bring this up on a retirement plan blog post?

Plan sponsors sometimes leaving some crucial questions unanswered.

If you have an inexpensive provider, your plan seems to be in compliance, and your participants like the web features, there is a tendency to assume that you have answered all of the right questions and ticked all the correct boxes.  You might even base a future provider search on asking those same questions.  But there are several impactful questions that are often not asked enough.

  • Who are the people to whom your employees are talking when they call the provider’s customer service line?  Do they work directly with the plan?  Or do calls get routed to a call center that is not under the same roof?
  • As the plan sponsor, what is your process for contacting the provider with different types of questions?  Do you get routed into a work ticket or phone group system?  Or can you pick up the phone or send an email, and get a prompt response from a contact who works specifically or your plan?  Does that person tend to be the same individual or individuals from year to year, or is it a revolving door?  Do you actually like talking to them?
  • How are things like refunds, loan defaults and other unusual distributions handled?  Do you simply get a form and/or notice to approve, or are you asked to fill out complex spreadsheets?  Do you sometimes have a hunch that you are doing work that your provider should be doing for you?
  • What are your internal costs?  Do you have to be overly involved in creating and sending out notices, for example, taking up scarce company resources in doing so?  How is that affecting your experience?

Like it or not, it’s a personal, even emotional experience.

While there is a tendency to view some services as a commodity, let’s remember that even tangible, physical products, such as the Ford Mustang, are in fact experiences.  Even driving an average car, by someone who sees it as mere A-to-B transportation, is still an experience, albeit an unengaging one in my opinion.  For your service providers, the experience is even more a part of the product.  The people your participants talk to on the phone, to the individuals who are dedicated to working on your plan, and the process of working through the day to day challenges of administering a retirement plan – these are all experiences, and these are all personal.

If your current personal experience with your provider is not what it could be, it may make sense to talk to them.  Perhaps there is something that you can do differently on your end – an available tool that you are not using, for example.  Maybe your organization, or theirs, has changed.  It could be that the provider’s team is no longer a good match with your current staff, and something can be changed with mutual agreement.  Or perhaps it’s time to acknowledge that moving on would be a good thing.

Ford almost killed one of their most recognizable and successful products because they were asking the wrong people the wrong questions.  Don’t forget that you and your participants are paying for an experience.

And if you are at the point of considering different service provider partners check out this resource here!

Scott Gehman, ERPA, CEBS
Retirement Plan Consultant