One of the critical tools for both DC plan sponsors and their outsourcing providers is the outsourcing contract. The contract serves three purposes.
- First, and perhaps most important: During the process of negotiating the terms of the contract, the sponsor and the outsourcing provider can clarify the terms of their relationship.
- Second, the contract serves as a guide to “who does what” – a roadmap for the outsourcing relationship.
- Finally, a well-written contract should describe how any disputes between the parties will be resolved.