Last time, talking about taking control of 401(k) fees, I referred to a process called "90-10-10" or, more correctly, "The '90-10-10' Solution" that we've developed and use. A few years ago, at a conference in Boston, I attended a presentation by one of the big pension and benefits consulting firms. Billed as a session on streamlining processes for benchmarking plans, it was really a pitch for their Request for Proposal (RFP) services. (Don't you love "educational" sessions that turn out to be sales pitches?)

Right about the time cost and required resources came up, one of the people in the room asked, "Isn't there a simple, less expensive way to just get an idea of where we stand?" The presenter paused dramatically, looked around the room, glanced at the ceiling and sadly shook his head. "No," said he, "there's not." Hrumph.

"No?" said I to myself, "Then there should be. I carry most of that around in my head." So, tuning out the rest of that session, I sketched out a system that, today, does 90% of a full-blown search (or Request for Proposals) at 10% of the cost in 10% of the time. Actually, in less than 10% of the time; more like a few days. Here's the way it works:

Because we're in touch with 401(k) providers all the time, we know what services they offer, how well they deliver, innovate and advance, what they charge, all the things that are important in finding a good fit between plan sponsor and providers. We catalog that information, of course, but have gone a step further: We've segmented that universe into "excellent" and "other" as assessments of their service model and have categorized them by the size of plans they best serve. In addition, we've shown the vendors exactly what information we require and how we want it presented to us.

We can, in minutes, reduce your plan's particulars to essential information and give it only to those providers who are "excellent" and ready to work hard for your business. Typically, if we send a request out in the morning, we will have our first responses by mid-afternoon. Some providers take a bit longer but, most commonly, all responses will be back within 4-5 days. As the responses come back, we create a single, consolidated analysis that compares each bid in all aspects of pricing. That report is then sent back to every vendor who responded so they can check our work, modify their bid and, most importantly, compare their pricing to every other bidder's response! (We used to find, when we began "90-10-10," there'd be some adjusting as the result of this step. Now, with several years of doing this, they give us their best bids right off but, well, "Be Ever Vigilant" is still the safest way).

The result, which generally takes less than two weeks, is typically a range of bids from 8 - 12 providers that, often for the first time, gives a plan sponsor a clear and complete understanding of the fees, charges, expenses and revenue arrangements, as well as compensation paid to brokers, advisors and administrators. It's usually an eye-opener!

Next: "Keep Your Mind Open."