My company is considering changing its 401K Plan Provider from MassMutal to ADP. Can anyone give me feedback or references for ADP 401K Plans and Customer Service on the Plans?
Answers
It depends on what you have hired them to do and the complexity of your existing plan. It also depends on what type of investments are offered by Mass Mutual compared to ADP. There are some types of insurance investments that will difficult to duplicate at ADP. Also beware of penalties that might be imposed by MM for coming out of their products. There are all sorts of fees that may be imposed by MM and ADP for the transfer. You need to make sure that the participants are not impacted financially by the decision to move. (Loads, penalties, fees, etc)
Can you tell me why you are considering ADP as opposed to other 401k providers like Fidelity, Vanguard, etc.? The reason that it is easier for you is not the right answer. As a fiduciary, you must make a decision that is in the best interest of the participant. It isn't your plan, it belongs to the participants.
Since your company is the Sponsor and a fiduciary of the plan, you have to make sure that the plan you offer is low in cost and in the best interest of the participant (i.e. offers them acceptable investment options). If you haven't already, please engage an ERISA attorney that can help you make decisions that won't get you in trouble with the law.
In summary, EVERY change in the plan must be viewed by its impact on the participant. It is very easy to violate your fiduciary responsibilities, so you need legal counsel to help you. (Note, don't rely on attorneys for MM or ADP).
I second Scott's advice and offer a real-world example.
I looked at ADP 401K plans about a year ago. Their sales reps seem to care about their customers so I decided to see what they offered. They took a list of funds we currently offer and "mapped" them to funds they offer. This was to show how much we could save in fees and still offer similar funds. Fortunately for us, we have an incredible 401K advisor who loves his work. He offered to look at what ADP presented us and give his opinion. It turned out for us that ADP would have been cheaper, but one of our most popular choices wasn't offered by ADP the way we currently had it set up (a fixed account whose return rate won't drop below a certain percentage). ADP's "mapped" fund was indeed much cheaper, but would have left our employee's with a much lessor return.