An RFP allows your organization to describe its objectives, priorities and expectations for bidding potential service providers. Going through the RFP exercise lays the foundation for a well-managed retirement plan and helps you identify the provider that will meet your needs.

The RFP also plays a critical role in fulfilling the fiduciary responsibility of acting prudently and for the exclusive benefit of plan participants and beneficiaries, and serves as a written record of the systematic process behind the selection of your plan service provider.

Our experience at PNC Bank, National Association has revealed six prudent practices that can help achieve a successful RFP undertaking.

Step 1: Form a Team

Before issuing an RFP, a team of internal resources should be assembled to develop the RFP and drive the process forward. This team should comprise diverse talents and experience. It ought to seek to balance the benefits of inclusiveness with keeping the team of an appropriate size conducive to accountability and efficiency.

To Do: Senior executive management should form the team and designate the team lead. Its first delivery should be a project timeline that extends from RFP development to service provider selection.

Step 2: Outline the Goals of Your RFP

Articulating your objectives will help to confirm that your RFP questions reach beyond the conventional ones and go to the heart of your particular needs. For instance, do you need to improve customer service levels? Will you need non-financial drivers of employee participation because of a limited ability to match employee contributions? Are you looking for an array of sophisticated investment choices or a simplified offering?

To Do: RFP team members should first agree to a vision of how your retirement plan should meet the needs of the company and its employees.

Step 3: Create an RFP That Is Clear and Comprehensive

Boilerplate and unclear questions will get you vague answers that will not help you in your decision-making. Make sure you cover the broad range of topics, including investments, services, fees, and fiduciary-related matters. Be clear about your expectations of service standards.

To Do: Avoid the “cookie cutter” RFP because it’s not going to get you the answers you need for your specific situation. Consider the use of an outside consultant to spearhead the RFP development.

Step 4: Review and Score RFP Responses

Once the responses have come back from candidate vendors, you will need to review and score them in order to cull the strongest responses and bring them to the next step in the process.

To Do: Use the time between sending out the RFP and receiving proposals to arrive at a system for scoring them. Consider creating minimum qualifications that will disqualify a service provider if they fail to meet them. Prioritize so that you can better rank proposals. For instance, are lower fees more important than robust education services? Is an extensive investment menu more valued than the latest technology?

Step 5: Interview with an Agenda

The interview is the first time you get to meet the potential retirement plan provider. Seek to schedule all the interviews (3–5 may be the optimal number) for the same day. That will allow you to compare the presentations more easily.

Be sure to schedule time between each interview (45–60 minutes) to give the team time to discuss what they’ve heard and to jot down notes.

To Do: Prepare an agenda for the meeting to help confirm that the meeting covers what you want it to cover, not only what the candidate wishes to cover. Come prepared with a list of questions that you need to have answered. Identify weaknesses in the responses and use the meeting to let the service provider address your concerns. Keep in mind that plan fiduciaries may only base decisions on what is best for the plan and its participants and not on potential benefits to the sponsor or others, such as discounts on other products unrelated to the plan.

Step 6: Select a Winner

Your next step will be to select a winner. When you have done that, be sure to notify the successful candidate of your decision in writing. As a sign of respect and appreciation for the other candidates, remember to advise them of your decision.