Westminster Consulting Brochure Defined Contribution & Defined Benefit | Page 13

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Vendor Benchmarking
As fiduciaries, plan sponsors have an obligation to benchmark and evaluate fees and services under ERISA. It is
both a fiduciary breach and a prohibited transaction to allow your plan to pay more than reasonable expenses.
Now that plan sponsors are receiving disclosure from covered service providers under 408(b)(2), that duty is
more explicit. This regulation concerns the disclosures that must be furnished to plan fiduciaries in order for a
contract or arrangement for plan services to be “reasonable.” The Department of Labor has stated that it believes
that plan fiduciaries need this information, when selecting and monitoring service providers, to satisfy their
fiduciary obligations under ERISA 404(a)(1) to act prudently and solely in the interest of the plan’s participants
and beneficiaries and for the exclusive purpose of providing benefits and defraying reasonable expenses of
administering the plan.
At Westminster, we know that even the most diligent sponsor can find the retirement plan benchmarking process
overwhelming if undertaken single-handedly. We assist the fiduciaries of qualified plans in a thorough vendor
analysis, offering clear recommendations and support throughout the process.
Either as a stand-alone service or part of the Ongoing Fiduciary Oversight engagement, vendor benchmarking is a
critical element in monitoring and evaluating how effectively plan providers are performing. ERISA requires that
benchmarking is done on a consistent and regular basis.
Westminster Consulting will evaluate plan vendors by identifying and evaluating 4-6 like market-positioned
vendors to your current partner, using the following criteria:
Throughout the process, questionnaires
are sent to each vendor and then we follow
up with an interview with the respondents.

Fees and Expenses

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Investment Flexibility

Participant Experience

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Plan Sponsor Common Needs/Objectives

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• Understanding recordkeeping, administration costs and competitiveness of fees.
• Fiduciary documentation as part of an annual plan review process.
• A means to compare their plan to other plans in their industry.
• To guide their participant education and communication efforts.

Fiduciary Benefits

• Clear documentation of an objective fiduciary process.
• Lower probability of litigation.
• Opportunity for reducing the cost of fiduciary liability coverage (if applicable).
• Above and beyond the requirements of 408(b)(2) compliance in obtaining full fee disclosure.

Assists in Plan Management and Oversight

• Supports plan design and benefits decisions by relating your plan to other plans like yours.
• Enables you to understand and move the plan toward “best practices.”

Plan Participant Benefits

• Not overpaying for services; helps maintain reasonable plan fees.
• Improved plan education and communications programs due to focus on Participant
Success Measures.
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