There was a new 401(k) plan sponsor on which providers are associated with being a “good value for the money”.

Providers Most Associated with “Good Value for the Money”

Among all plan sponsors

1   Empower Retirement

2   Ascensus

3   Fidelity Investments

4   Betterment

5   OneAmerica

6   Vanguard

7   Paychex

8   American Funds

9   ADP Retirement Services

10 Wells Fargo

Source: Market Strategies International: Cogent Reports™, Retirement Planscape: May 2016

I think most of these providers are actually good, but did you see what I see? The two biggest payroll providers made the list. What does that tell you? Plan sponsors may know about paying low fees, but they might not really understand good value. These payroll providers charge a reasonable fee, but their lack of attention to compliance testing details doesn’t make them a good value when errors are discovered and have to be corrected.

Surveys are a nice thing, but when it comes to judging whether a 401(k) provider is any good, most of the time it’s the plan sponsor that has so little information in order to make an informed decision.  Would you want an opinion from the one entity that knows the least about 401(k) plans? It’s like asking a vegan for their opinion on the best steakhouse.

So I think surveys like this are kind of meaningless because you can write a book on what plan sponsors don’t know about their plan providers.