Selecting a single recordkeeper
A public solicitation, Invitation to Negotiate or ITN20LD-140 for Recordkeepers Services for University of Florida Retirement Plans – currently UF 403(b) Plan, J Hillis Miller Health Center 403(b) Plan, UF 401(a) FICA Alternative Plan and UF Special Pay Plan, was issued on April 8, 2020, and publicly noticed on the UF Procurement Services website, where all documents regarding the opportunity were available. The solicitation’s stated goal was to award to one (or more) suppliers who could:
- Assess current fee structure and identify any savings
- Provide better, more focused, customized education for plan participants in all forms (group, one-on-one, social media, etc)
- Improve accuracy of administration data and communication to plan sponsor and plan participants
- Further automate some currently manual administration items
- Potentially streamline recordkeepers across all plans
Further details on these criteria are listed below.
Nine suppliers responded to the solicitation. After deliberation, the committee met with three and selected Fidelity Investments due to the company’s strength in all evaluation categories, its ability to provide single recordkeeper support for the fund lineup that UF’s committee selected (separate from the solicitation process) with a very competitive fee structure and robust employee support.
Advantages Fidelity demonstrated included offering lower administrative fees to participants ($29 as compared to other vendors that charged as much as $75), opportunities for participants to invest on their own or receive assistance from someone (including their current advisor/counselor), the ability to offer a best-in-class, non-proprietary open architecture investment menu, and the capability to take what UF currently offers and coordinate participant accounts into a single website for participants.
Additional advantages Fidelity offers include its status as the No. 1 provider of workplace savings plans and a unit dedicated to serving higher education clients and tax-exempt entities. Fidelity currently serves more than 725 higher education clients with more than 6.6 million tax-exempt participants.
Criteria on which vendors were judged
UF expected suppliers to be able to provide at least the below services:
Employee Communication and Education
• Seek to educate employees and plan participants through group meetings, individual meetings, webinars, targeted communications, messages via quarterly statements and emails.
• Seek to reflect the diversity of plan participants covered by the plan and educate according to each group’s specific needs.
At least annual meetings (or as needed) at UF to include a review of plan success, relationship building opportunities, strategic discussions regarding how other higher ed plan sponsors are addressing current industry trends and issues
Required recordkeeping functions
• Qualification of rollovers into the plan
• QDRO processing and qualification and alternate payee set-up
• In-service withdrawal qualification and processing – ideally automated
• Calculation and processing of excess deferrals and contributions
• Hardship withdrawal qualification and processing – ideally automated
• Catch-up contribution eligibility and processing
• Set-up and monitoring of installment payments
• Lump sum distributions
• Facilitate employee deferral elections
• Process small dollar cash-out distributions
• Process investment mix elections and reallocations
• IRA cash-outs
• Post contributions to participant accounts
• Support qualification of rollovers into the plan
• Quarterly participant statements: electronic or paper-based
• Delivery of confirmation notices in paper and electronic form
• Life event processing including leave of absence, military leave and beneficiary support in the event of participant death
• Auto enrollment and auto increase
• Loan maintenance across vendors
• 402(g) and 401(a)(17) monitoring
• Preparation and maintenance of Summary Plan Description
• Monitor plan contribution limits
• Preparation and distribution of Summary Annual Report
• Section 415 testing
• Preparation and distribution of Form 1099-Rs to persons receiving distributions
• 408(b)(2) and 404(a) disclosure
• Preparation and distribution of Eligible Automatic Contribution Arrangement Notice (EACA)
• Notices associated with QDIA compliance