Years ago, as a naïve associate at a semi-prestigious law firm (sorry Lois), I got the short end of the stick to attend a quarterly Taft-Hartley meeting in Staten Island for a multi-employer plan. If you ever have to drive from Long Island to Staten Island, you know what a short stick it is.
The head of the union wanted recommendations for an actuary for a part of their request for proposal (RFP) process. I thought of a few actuaries I could recommend, based on my 9 ½ years working for third-party administrators. I mentioned it to co-counsel and was pulled aside, he told me that the whole RFP process was a sham because the Taft-Hartley plan had absolutely no interest in hiring another actuary. They were happy with who they had.
The RFP process or the less structured process for reviewing plan provider including getting competing proposals from other providers is all about a process and a process that is an actual sham is not a real process. The current provider should partake in the RFP process or at the very least, the plan sponsor should treat all providers as potential providers instead of just deciding that they will keep the status quo because the status quo may not be sufficient.
When it comes to fiduciary responsibility that we preach as a plan provider, we must keep in mind that everything must be above board. Otherwise, it’s not really a process.