Pooled employer plans have moved from novelty to mainstream. More than 50,000 401(k) plan sponsors have adopted a PEP model since SECURE 2.0, and adoption continues to build as small and midsize employers revisit vendor contracts and fiduciary workloads.

Most organizations approach the health benefit broker RFP as a procurement exercise. They issue a questionnaire, collect responses, compare fees, and select a winner. That process is better than nothing. But it falls short of what a well-designed RFP is actually capable of — and what regulators, courts, and ERISA counsel increasingly expect.

Most plan sponsors believe their health benefit broker is compensated by a commission or a flat advisory fee. Some are. Many are not — or at least not only. Broker compensation in the health benefits market is layered, and the layers that are hardest to see are often the ones that create the most significant conflicts of interest.

If you ask most health benefit brokers whether they put their clients first, you will get a confident yes. Some will hand you a brochure. Some will point to their mission statement. A few will add language to their service agreement that sounds substantial. Almost none will actually commit to operating as a fiduciary — because that commitment comes with real obligations they are not willing to accept.

For decades, retirement plan advisors operated in a world where conflicts of interest were common, compensation was opaque, and 'what's best for the client' was more of a tagline than a legal obligation. Then came ERISA, DOL rulemaking, and a wave of litigation that changed everything. Retirement advisors today must disclose compensation, avoid prohibited transactions, and in many cases formally adopt a fiduciary standard. That transformation didn't happen overnight — but it happened. Health benefits are next.

One of the most common mistakes organizations make during vendor evaluations is underestimating the amount of time the process requires. Many RFPs begin too late in the cycle — often just months before open enrollment or renewal periods. At that stage, organizations are already focused on implementation and execution. This compressed timeline can limit the effectiveness of the evaluation itself.

Many organizations describe their RFP process as independent. But independence involves more than simply using a third party.

A truly independent process is defined by how evaluation criteria are established, how providers are compared, how compensation is reviewed, and how decisions are documented. The structure behind the process matters.

Fifteen years ago, the retirement plan industry was shaken by a fiduciary reckoning that most employers never saw coming. Brokers who had quietly collected undisclosed compensation from investment providers were suddenly required to disclose every dollar, legally sign on as fiduciaries, and operate in the full light of regulatory scrutiny. The firms that hadn’t prepared paid a steep price.

In many benefit and retirement plan evaluations, the existing broker or advisor plays a central role in managing the RFP process. This arrangement is common throughout the industry.

Advisors often help gather information, coordinate vendors, develop questionnaires, organize responses, and guide sponsor discussions. Their experience and market knowledge can be valuable. However, this structure raises an important question: Can a provider objectively manage an evaluation in which they are also being evaluated?

For many organizations, evaluating benefit and retirement plan vendors has become significantly more complicated than it was a decade ago.

What was once viewed as a periodic administrative exercise has evolved into a process involving:

•       Increasing regulatory expectations

•       Compensation transparency concerns

•       Vendor consolidation

•       Growing fiduciary scrutiny

The advisor relationship is often the hardest fiduciary decision for plan sponsors to examine objectively.

These relationships are usually long-standing, built on years of collaboration, and grounded in genuine trust. The advisor knows the plan, the participants, and the committee. They've been in the room for difficult decisions.

Most retirement plan RFPs are not run with bad intentions.

Plan sponsors and their committees generally approach the process seriously. They collect proposals, review fees, talk to references, and make a decision they believe is sound.

Two plan sponsors conduct retirement plan RFPs in the same quarter.

Both collect proposals from the same providers. Both choose a finalist. Both complete the transition — or decide to stay with the incumbent. From the outside, the processes look similar.

For most plan sponsors, the retirement plan RFP conversation starts the same way.

Something goes wrong. A fee complaint surfaces. A committee member raises a concern. Litigation lands nearby and suddenly everyone is asking whether the current arrangement would hold up.

When plan sponsors hear about fiduciary litigation, the immediate assumption is often that the dispute revolves around plan performance or a specific outcome.

Did the plan cost too much?
Did the benefits structure create a problem?
Did something go wrong operationally?

Self-funded health plans have become increasingly popular among employers seeking greater control over healthcare costs.

Instead of paying fixed premiums to an insurance carrier, self-funded employers assume the financial responsibility for employee healthcare claims. This approach can offer advantages such as increased transparency, improved flexibility in plan design, and the ability to capture savings when claims are lower than expected.

Many plan sponsors take pride in maintaining long-term relationships with service providers.

It’s not unusual to hear statements like:

• “We’ve worked with them for years.”

• “They understand our organization.”

• “They’ve always taken good care of us.”

For many plan sponsors, broker and vendor evaluations tend to follow a familiar pattern.

They happen late in the year — often just months before open enrollment.

At that point, the focus is immediate and practical:

• Finalizing plan design

• Confirming pricing

• Preparing employee communications

Most plan sponsors do not interact with ERISA attorneys until a problem has already surfaced.

Sometimes it is a regulatory inquiry.
Sometimes it is litigation.
And sometimes it is simply a concern that something about the plan’s oversight process may not be fully aligned with fiduciary expectations.

Over the past decade, private equity has significantly accelerated consolidation across the retirement and benefits industries.

Brokerages, consulting firms, recordkeepers, and third-party administrators are increasingly being acquired or backed by private equity investors.

For plan sponsors, this shift raises an important question:

How does private equity ownership affect the service providers responsible for managing critical benefit programs?