By Mike Wilder | February 25, 2016

Retirement Clearinghouse (RCH) is pleased to offer a three-part series of educational videos on plan terminations, presented by Mike Wilder, RCH’s Vice President of Client Services. These videos are intended to provide plan sponsors with a basic understanding of key plan termination process steps, the common mistakes that are made by plan sponsors, and the key criteria for selecting a plan termination services provider. We hope you’ll find these videos interesting & informative!

DC Plan Termination - Five Criteria for Selecting a Services Provider

Terminating a retirement plan takes a lot of work, a lot of planning and requires specialized skills. Not surprisingly, most fiduciaries choose to outsource plan terminations to service providers.

Selecting an outsourced provider is a critical decision. To help simplify the process we suggest using the five criteria below.

#1 – Deliver a full range of services including:

  • Mailing of required participant notices
  • Participant address verification
  • Multi-lingual call center support for responding participants
  • Safe Harbor IRAs for unresponsive participants

#2 – Have expertise in locating missing participants

The DOL is very specific about what is required if a participant is deemed to be “missing”. When selecting an outsourced provider make sure they have a proven track record of fulfilling those requirements including:

  • Verification of/updates to participants’ last best-known address
  • Locating beneficiaries of deceased participants
  • Utilization of multiple web-based resources
  • Oversight of USPS Certified mailing

#3 – Focus on minimizing cash outs and promoting account consolidation

Unfortunately many participants will be tempted to cash out their retirement savings during a plan termination.

To help reduce cash outs and increase retirement account consolidation to an existing account, like a new employer’s plan, make sure the provider has professionals who will provide distribution counseling.

#4 – Offer fiduciary-friendly Safe Harbor IRAs and on-going account support

  • Continuous efforts made to locate missing account holders
  • Straightforward, easy-to-understand fee structure
  • Monthly account maintenance fee vs. annual fee
  • No lock-up provisions
  • Ability to move assets to more suitable investment options
  • Account consolidation assistance

#5 – A proven track record in facilitating plan terminations:

  • How long they’ve handled terminating plans
  • The number of terminating plans they’ve worked with
  • The mix of large vs. small plans

Working with the right plan termination service provider can alleviate a lot of headaches and save a lot of time. To learn more about the plan termination services of RCH call 866.827.9608 or email

Previous video: Common Mistakes Plan Sponsors Make (part 2 of the three-part series)