YOU HAVE FOUND OUR OLD WEB SITE. BE SURE TO CHECK OUT OUR NEW AND IMPROVED SITE!     Employers: Adopt a Single Vendor Approach to the 403(b) and 457(b) Employers could save themselves and their employees a lot of headaches (and money) by adopting a single vendor approach to retirement plan selection. That is of course, if they go about it the right way.     School districts are suffering from vendor overkill. The typical 403(b) vendor list at the K-12 level is long and unwieldy. The largest school district in the country, Los Angeles Unified School District, is the poster child for this mess. They boast (tongue in cheek) more than 140 "choices." Choice in this case is an extremely subjective term. Many of these "choices" at LAUSD are high-fee variable annuity offerings sporting onerous surrender charges. School districts and not-for-profit employers would be wise to adopt a single vendor approach to both the 403(b) and 457(b).   Brad Smith, a principal at consulting firm Bolton Partners Investment Consulting Group, Inc., advocates a single vendor approach to both the 403(b) and 457(b). He favors a Request for Proposal (RFP) process where districts spell out exactly what they want from a vendor. Vendors would then compete to earn the right to be the sole provider. One of the strongest arguments for adopting the single vendor approach, according to Smith, is that it saves participants money. "Participants are the ones paying all the fees," he notes. "Employers have the power to negotiate fees." Other benefits Smith sees from the single vendor approach include:   access to higher quality investment options in all appropriate asset classes — vendors would pitch best products better control of compliance — only dealing with one vendor winning vendor better able to provide unbiased education and communication to employees vs. current sales pitch approach reduction or elimination of employer paperwork and administration employer could demand that online enrollment be offered plan would be perceived as a benefit     A RFP process would allow employers to call the shots while ensuring IRS compliance. The big caveat, of course, is that the correct vendor must be selected. Firms like Smith's Bolton Partners Investment Consulting Group, Inc. exist to help employers make wise decisions. One last caveat: the consulting firm aiding in vendor selection must have no affiliation with vendors, and must not sell product.   Home | Disclaimer | © 2002 bWise Guys, LLC. All rights reserved.