Most Recordkeeping RFPs to Benchmark Fees

“More than half of plan sponsors have indicated they are likely to conduct a search for recordkeeper within the next two years,” said Kevin Chisholm, senior analyst at Cerulli Associates. “However, many of these plan sponsors have no intention of leaving their current recordkeeper.”  

In Cerulli’s recent report, “State of Large and Mega Defined Contribution Plans: Investment Innovation and the Plan Sponsor Perspective,” 41.9% of plan sponsors surveyed indicated they expect to do a recordkeeper search in the next two years, but only to benchmark pricing. Only 13% of plan sponsors said they expect to perform a search because they are actively seeking a new recordkeeper.  

“There is concern that the current emphasis on costs will increase the frequency of provider searches and force recordkeepers to re-bid on plans before they become profitable,” Chisholm said. “About 60% of plans have been with their current recordkeeper for more than three years. But, a significant percentage, slightly more than 40%, have been with their current recordkeeper for less than three years.”  

The report examines the new ideas and products that have been developed for defined contribution (DC) plans in the large and mega segments (Large = $250 million to $1 billion, Mega = $1 billion +). It includes analysis of plan sponsors’ perspective of their DC plans and the likelihood of implementing new plan designs.    

The report provides asset managers, recordkeepers, and consultants with a window into plan sponsor thinking via a proprietary survey administered to more than 250 plan sponsors that fall in the large and mega segment. Other data contained in this report comes from surveys of DCIO asset managers. More than 30 conversations with executives at recordkeepers, investment consultants, and asset managers support the data and findings.  

The report is available for purchase by contacting CAmarketing@cerulli.com.