mercer webcast reaping the rewards of a dc vendor … · 2020-03-18 · reaping the rewards of a dc...
TRANSCRIPT
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REAPING THE REWARDS OF ADC VENDOR SEARCH
JANUARY 27, 2015
Pete Apor, FujitsuLinda Delivorias, MercerErica Swett, Mercer
MERCER WEBCAST
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MERCER WEBCAST
Pete AporFujitsuDirector of Retirement Services
Linda Delivorias, Esq.MercerPartner & Northeast Market DC Consulting [email protected]
Erica SwettMercerPrincipal & Central Market DC Consulting [email protected]
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Speakers
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MERCER WEBCAST 2
Discussion
• ERISA’s vendor search requirements
• Strategic & tactical vendor search process
• Fujitsu’s experience
• Questions
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MERCER WEBCAST 3
• Identify viable, experiencedcandidates
• Evaluate based on consistentand comprehensiveinformation
• Document due diligenceappropriately
Vendor Selection Is Fiduciary Function Under ERISA
OrganizationalAssessment
Fees
Qualitative /Quantitative
ServiceAssessment
ServiceDelivery
Team
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MERCER WEBCAST
A Successful Vendor Selection Process Incorporates AdaptableOutcomes to Support Vendor Management
Flexible FeeSchedule
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CustomizedPerformanceGuarantees
ComprehensiveOutsourcing
VendorManagement
ImproveParticipantOutcomes
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MERCER WEBCAST
And Now a Word From Our Audience
• What is the primary issue that would lead your organization toconduct vendor searches?
– Satisfy fiduciary obligations– Improve plan sponsor service– Improve participant service– Reduce fees– Other
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MERCER WEBCAST 6
2004 2006 2008 2010 2012 2014 Future
Prudentialacquires
Cigna(2004)
Bank of Americaacquires
Merrill Lynch(2008)
VOYA Retirementis Branded
(2014)
Charles Schwabacquires
401(k) Company(2007)
Wells FargoacquiresWachovia
(2009)
Xeroxacquires
ACS(2010)
Great-Westacquires
JP Morgan(2014)
Hancockannounces
acquisition of NYL(2014)
EmpowerRetirement is
Branded(2015)
Recordkeeper Consolidation Continues to Impact Plan Sponsors
ING acquiresCitiStreet
(2008)
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MERCER WEBCAST
And Now a Word From Our Audience
• Has fee compression and/or vendor consolidation resulted in adecrease in the quality of your vendor’s service delivery?
– Yes– No– Don’t know
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MERCER WEBCAST 8
Vendor Search Outcomes Are Changing
Yesterday
• Full outsourcing• “Customized”
communications• Open architecture
investment platform• Transparent, market
competitive fees
Today
• Flexible, secured servicedelivery
• Measurable multi-mediacommunications program
• Investment strategy builton participantdemographics
• Fee schedule thatoptimizes vendorrelationship
…while the need to fulfill fiduciary responsibilitiescontinues to be critical
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MERCER WEBCAST 9
Flexible Service Delivery
• Support retirement preparedness objectives
• Accommodate targeted designs
• Manage leakage opportunities
• Address data exchange requirements
• IT data security requirements
• Cloud data sharing
• Support plan sponsor reporting requirements and data access needs
Service Delivery Model – More Than Processing Transactions
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MERCER WEBCAST 10
Multi-media Communications
• Delivery through mobile and traditional media
• Control over content, delivery and access of campaigns and tools
• Targeted messaging
• Integration with broader financial wellness tools
Communications Is Now Employee Engagement
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MERCER WEBCAST 11
Investment Strategy
• Experience with non-mutual funds
• Tiered investment structure to reflect different participant risk profiles
• Comprehensive communication/trust services to accommodate complexinvestment structures and annuity products
• Material terms and conditions of brokerage and managed accountpartners
Movement to Simplified Investment Structures is Not WithoutComplexity
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MERCER WEBCAST 12
Fee Schedule
• Per participant pricing independent of investment options
• Relationship considerations in establishing profitability targets
• Flexibility in managing revenue sharing
• Multiple plan considerations
• Impact of external third party service arrangements (advice, brokerage,etc.)
Fee Structure Should Mitigate Fiduciary Risk
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MERCER WEBCAST
• Have vendor services become so commoditized that the “pain”of a conversion outweighs the potential benefits of starting anew relationship?
– Yes– No– Don’t know
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And Now a Word From Our Audience
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MERCER WEBCAST 14
Mercer’s Vendor Search Approach Aligns Sponsor Goals WithVendor Service Delivery Model
Objectives
Interdependencies
EmployeeEngagement
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MERCER WEBCAST 15
Implementation Begins With Vendor Selection
Selection
• Currentrelationship exitstrategy
• Timing forimplementation
• Coordination ofinternalresources
• Lead time forcustom builds
Contracting
• Fees at risk forkey services
• Limits of liability• Advantageous
contract terms• Related third
party agreements
Conversion
• Appropriateexperiencedconversionteam
• Defined projectmanagementprocess
• Documentationof decisions
• System anddata exchangetesting
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MERCER WEBCAST 16
Fujitsu’s Experience
• The leading Japanese information andcommunication technology company (ICT)Fujitsu
• $55 B annual revenue
• 560 companies worldwide with 170,000 employeesOrganizationBackground
• 401(k) plan and 2 non-qualified plans
• $1.3 B assets with 11,000 participants
• 98.5% participation and 10% average deferral
• Auto enrollment at 8% with auto increase and autocatch-up
• Average company match of 8%
Plan Background
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MERCER WEBCAST 17
Fujitsu’s Experience
Client Situation
• Incumbent in place for 3 years
• No current service issues
• Desire to test the marketplacerelative to service levels andpricing
• Interest in innovative, broad-basedsolutions to improve wealthaccumulation opportunities
Mercer Solution
• Tactical and strategic vendor search
• Prequalification of vendors
• Highly customized RFP
• Finalist interviews (versuspresentations)
• Site visits
• Final negotiations
• Note: Blue items are tasks to be completed
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MERCER WEBCAST 18
How Can You Identify the Optimal Partner to Deliver theAppropriate Services Timely, and At the Best Price?
Design
Delivery
EmployeeEngagement
SUCCESS
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MERCER WEBCAST 19
Questions
QUESTIONSPlease type your questions in the Q&A section of the toolbarand we will do our best to answer as many questions as wehave time for.
To submit a question while in full screen mode, use the Q&Abutton, on the floating panel, on the top of your screen.
CLICK HERE TO ASK A QUESTIONTO “ALL PANELISTS”
FEEDBACKPlease take the time to fill out thefeedback form at the end of this webcastso we can continue to improve. Thefeedback form will pop-up in a newwindow when the session ends.
www.mercer.com/webcastsView past recordings and sign up forupcoming webcasts
Pete AporFujitsuDirector of Retirement Services
Linda Delivorias, [email protected] [email protected]
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