Retirement plans: Why choosing local matters

July 25, 2022

How many times have you had to call a company using an 800 number? Corporations have shifted our thinking to just accept the frustrations of these calls as a normal part of doing business with them. But does it have to be that way? Sure, these 800-number corporations may solve our needs over the phone (hopefully), but do they always have our best interests in mind?

Group 401(k) plans are no different. Plan sponsors choose mega-bank providers for their plans regularly, but bigger doesn’t always mean better — and can often lead to frustration for participants. Retirement plans are a different animal when it comes to employee benefits. When a need arises with your retirement plan, having a local provider matters.

When your plan is administered locally, your participants will be calling and chatting with someone in the same area code (possibly even the same ZIP code!) — a local person they might bump into at their favorite restaurant or the grocery store. They’re not just a voice on the other end of the phone, but someone who lives and works in their community. 

Let’s talk tech

Technology is another good example of why local is better. Millions of dollars are spent every year by companies to upgrade their technology and websites. Does this mean they’re easier to use? Sometimes, but not always. Local plan providers have the unique ability to see customers face-to-face and show them how to use this great technology. Many retirement plan providers are leaving behind face-to-face interactions — one of the most underutilized features for ensuring retirement plan success. 

One main concern that companies have with putting their retirement plans in the hands of a local bank is the ability to keep up with the technology advancements big providers are rolling out each year. While important, technology can only do so much. And great technology isn't exclusive to the big banks either.

Company retirement plans are complicated, and when issues arise, will technology solve the issue? It probably won’t be corporate technology that resolves issues for you, but rather real people who can listen to your problem and work through a solution together. If you’re one of the hundreds of plans at a big-box retirement plan provider, where will your issue fall on the priority list?

Staying informed

One of the other benefits of choosing local is education. Many companies that offer retirement plans say they can provide in-person education, but at what cost? Does the plan sponsor have to guarantee a certain number of plan participants in the meeting room to reduce the cost? Who is footing the bill for an educator to fly to your town, rent a vehicle, and stay in a hotel — especially during times when travel is so expensive? Most likely, those costs are passed along to plan participants. If you can reduce or eliminate these costs, the savings can be passed along to the participants.

Local matters. Local provider employees are a part of your community. They’re fully vested in the success of the companies they serve and the people in those companies. They know the success of their company depends on the success of the companies they serve. By choosing local, you’ll reap the rewards of putting your retirement plans in the hands of people who care about your success and the success of your employees.

Ready to get started? Contact one of our Retirement Plan Services experts, and we’ll be happy to help.

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