Within the contract, performance standards or expectations should be established. These standards should be as specific and detailed as possible to avoid future misunderstandings The documented standards also become the basis for developing a service agreement between you and the vendor.
Once you have developed the standards and presented them to the vendor, you can then begin to formulate how you intend to measure actual performance against then begin to formulate how you intend to measure actual performance against expected performance.
In essence, you are developing a “performance appraisal” for your vendor that has many similarities to developing a performance appraisal process for employees. Develop specific, clear measurable standards
Determine how performance will be measured Determine how performance will be measured
Communicate the standards and methods of measurements
The table on the following pages includes a process or service along with a possible standard that might be used to assess actual performance against expected
I. Phone Center
Process Performance Standard
Speed of Answer 100% of all calls will be answered immediately by the Voice Response System.
90% of all calls opting out to a Participant Service Representative will be answered within 20 seconds. Representative will be answered within 20 seconds. Call Abandonment Rate Less than 2%.
VRS Availability With the exception of routine maintenance, VRS will be available 99% of the time.
Issue Resolution 95% of participants requiring follow-up calls will be contacted within 2 business days of initial inquiry.
95% of all issues will be resolved within 3 business days of receipt of all required information.
100% of all issues will be resolved within 5 business days of receipt of all required information.
II. Plan Administration
Process Performance Standard
Data Processing Plan sponsor data files will be processed within 3 Data Processing Plan sponsor data files will be processed within 3
business days of receipt of valid, readable files. Invalid or unreadable files will be reported to plan sponsor within 24 hours.
Plan sponsor will be provided with activity reports related to processing data files within 3 business days of receipt of valid, readable files.y p ,
Plan Sponsor Reporting 98% of standard plan sponsor reports will be mailed within 20 business days after the close of the
reporting period.
90% of all ad hoc reports (of reasonable complexity) will be mailed within 7 business days of plan
sponsor request. sponsor request.
III. Defined Benefit Services
Process Performance Standard
Benefit Estimates & 95% of all confirmation statements of automated Final Calculations benefit estimates will be mailed within 3 business
days of request.
95% of all confirmation statements for automated 95% of all confirmation statements for automated final benefit calculations will be mailed within 5 business days of receipt of indication of separation from service and final earnings information from the plan sponsor (if active), and all required participant paperwork.
95% of all confirmation statements for manual benefit f estimates will be mailed within 5 - 7 business days of receipt of all information required to complete
calculation.
100% of all benefit estimates and calculations will be accurate (assuming complete and accurate data). Pension Distributions 98% of all monthly pension distributions will be Pension Distributions 98% of all monthly pension distributions will be
mailed on the date mutually agreed upon by Fidelity and the client.
100% of all pension distributions will be accurate. 98% of all monthly pension funding reconciliations will be completed within 5 business days prior to each month’s end
each month s end.
Literature Distribution 95% of all literature requested will be mailed within 5 business days of request.
IV. Defined Contribution Services
Process Performance Standard
Quarterly Participant 100% of all statements will be distributed by the 20th
Statements of the month following quarter end.
Quarterly ADP/ACP Tests Tests will be completed within 15 business days from the request.
from the request.
Literature Distribution 95% of all literature requested (402(f) notices, investment return information, and confirmation statements) will be mailed within 3 business days of request.
V. Health & Welfare Services
Process Performance Standard
Transactions 90% of participant-directed transactions (family status changes terminations COBRA and HIPAA status changes, terminations, COBRA and HIPAA events) will be processed and confirmation
statements will be mailed within 5 business days of receipt of all required information. 1
Excludes annual enrollment, which is processed on a pre-determined batch schedule.
Carrier Files 90% of all carrier files will be sent on the scheduled Carrier Files 90% of all carrier files will be sent on the scheduled
date.
Literature Distribution 95% of all literature requested (HIPAA certificates, Retirement kits, COBRA notices, and confirmation statements) will be mailed within 5 business days of request.
ID Card Fulfillment Accurate ID cards will be mailed to employee’s ID Card Fulfillment Accurate ID cards will be mailed to employee s
home address of record within 10 working days from date of new hire or other change.
It is important that the objectives and measurements you establish be mutually agreed upon in order for them to be used to develop a performance agreement signed by each party. The performance agreement typically contains financial penalties for performance below the agreed upon acceptable level
below the agreed upon acceptable level.
Proposed Fee Reduction Service
Identify any account/fund adjustments and provide participant list of account/ fund adjustments
Performance Standard 99% of payroll data errors are discovered through edit process within 24 hours of receipt of payroll transfer and list of needed account fund adjustments is made
Measurement The list is provided via e-mail to Company no later than three business days from the payroll processing date by which the need for adjustment was discovered
p
If standard not met $5,000 if list is not provided
to Company
Manual loan repayments Complete annual profit sharing allocation calculation
Post quarterly company
98% next scheduled post after check clearance Two business days after final data and Company input have been provided Next business day after
Manual check log
Final allocation test docu-ment provided to Company for review and final sign off Final purchase confirmation
$5,000 $10,000
$10 000 Post quarterly company
stock dividends to participant accounts Return phone calls and e-mails from company benefits staff
Respond to requests made
Next business day after receipt of data and all information from Company 95% within 24 hours of receipt of e-mail or phone mail
95% within 24 hours of
Final purchase confirmation and quarterly service review Company and TPA maintain a log of calls/e-mails
Company and TPA maintain
$10,000
$10,000
$10 000 Respond to requests made
by company benefits staff for plan/participant information not available to benefits staff through other means, where requests are in writing (e-mail, Fax Letter)
95% within 24 hours of
receipt Company and TPA maintain a log of Company benefits staff requests and TPA responses
$10,000
Payroll data feedback -TPA to Company
Mailing of any plan literature, transaction confirmations and
100% transmitted as scheduled or hardcopy on next business day, and 100% content accuracy 98% mailed within two business days of release
Daily file transmission verification log and participant feedback
Call center/Internet and VRS log/quarterly meetings
$10,000
confirmations and participant checks
Edit and posting of payroll-based contributions/loan repayment
Initial edit completed one business day after receipt of payroll feed from
Company. Posted to record-keeping system within two business days of receipt of
Transaction file headers/ quarterly service review
$25,000
business days of receipt of payroll feed from Company
Proposed Fee Reduction Service
Participant survey results on the call center service Participant survey results on the on the internet
applications Performance Standard 90% of participant responses are 5, 6, 7 90% of participant responses are 5, 6, or 7 Measurement
Quarterly participant survey responses
Quarterly participant survey responses
If standard not met $10,000 $10,000
Participant survey results on the IVR
Company benefits staff survey results (periodic survey completed by staff) Monthly plan-to-trust
90% of participant responses are 5, 6, 7 95% of responses are 5, 6, 7
Within 10 business days of
Annual participant survey responses
Quarterly survey responses
Reports delivered to
$10,000 $10,000
$5,000 Monthly plan to trust
reconciliation performed and reports delivered to
Company
Identifies plan-to-trust reconciling items and achieves resolution of such items
Within 10 business days of receiving the trust
statements
TPA raises items to the attention of both Trustee and Company and achieves resolution before delivery of
Reports delivered to Company
Quarterly service meeting/monthly reports which clearly identify reconciling items and/or
$5,000
$25,000 items
Provide the Statement of Financial Accounting Standard No. 87 footnote disclosure information
resolution before delivery of next following monthly reconciliation report.
Five business days from the receipt of all requested data
reconciling items and/or adjustments
Report delivered to Company
$10,000
Error-free overnight trading
processing All electronic investment fund directions received by 4:00 PM (E.S.T.) will be processed same day, receiving that day’s closing NAV, and will be 100% accurate in execution of the net purchase or sale orders
Record-keeping system via plan sponsor online system and incident of participant complaints
$25,000 per error plus Company will fund any participant account losses resulting from error
net purchase or sale orders for each fund pursuant to the plan sponsor and participant directed transactions
Proposed Fee Reduction Service
Identify participant account record-keeping errors made by TPA and correct such errors
Performance Standard When participant account errors are discovered by Company, a participant or TPA, identify scope of error(s); affected
participants; gain or loss to account resulting from error;
Measurement Survey conducted within 30 days of error resolution. Quarterly meetings service
If standard not met $10,000
account resulting from error; identify source of error(s)/ cause of error(s); propose correction method including funding approach (if
applicable); survey results of SERP team members involved in correction process should result in
Timing for providing the annual valuation report for
process should result in satisfaction scores that clearly indicate Company’s satisfaction with TPA’s responsiveness in correcting the errors. Four weeks from receipt of
complete information Report delivered to Company
$5,000 annual valuation report for
the defined benefit plan(s) Complete ADP Test
complete information Projection of ADP test completed within five business days of receiving compensation data from Company. Final ADP test completed within five
Company
Test reports delivered to Company
$10,000
completed within five business days. Tests contain no calculation errors.
