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Life Health > Running Your Business > Prospecting

What a Retirement Plan TPA Can Do

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What You Need to Know

  • TPAs know how things work.
  • They help with compliance testing, reviewing participant transactions and Form 5500 preparation.
  • They may help connect clients with advisors.

The role of a retirement third-party administrator, or TPA, is both demanding and highly collaborative — and, in my opinion, for many advisors, working closely with TPAs is nothing short of essential.

TPAs manage many of the day-to-day aspects of a retirement plan, bringing expertise on plan compliance, design and consulting.

Of course, I’m in this world, but I am very much impressed by what good TPAs do. They make the perfect partner for investment advisors and recordkeepers, and they play an important role in the trifecta of maintaining 401(k) plans.

Working with a TPA ensures that retirement plans meet legal and regulatory requirements but also comes with multiple benefits. TPAs provide a number of solutions beyond the day-to-day administration.

To leverage their strengths, it’s important to understand their role and the value they can bring.

1. TPAs will step in to be problem solvers and are key to resolving issues.

Since a TPA’s primary focus is plan administration, they provide the practical answers you need regarding plan compliance, administration, consulting, and innovative design options. TPAs are your advocate and will help you navigate the complex rules and provisions applicable to your plan. They can handle everything from the routine to the complex in order to resolve issues that can be a drain on an advisor’s practice.

2. TPAs help advisors build business and uncover new opportunities.

Because TPAs are such a trusted resource, clients often turn to them for help in situations when a client needs a new advisor. As such, a skilled TPA can serve as a great referral service, helping to build client business and uncover new opportunities.

3. TPAs can work well together with the right recordkeepers.

It is important to choose a TPA and recordkeeper who work well together, by understanding their respective roles and responsibilities, having clear and consistent processes, and effectively and easily sharing information. Recordkeepers must supply reliable data to TPAs to execute compliance testing, conduct Form 5500 preparation, and review participant transactions. In turn, TPAs support and collaborate with the recordkeeper and advisor to provide clients with great service and consistent process.

4. TPAs bring deep technical support to the table.

TPAs are known to bring excellent technical support and add a layer of local expertise in servicing clients’ needs from plan design consulting to regulatory expertise and compliance testing solutions.

5. TPAs provide invaluable support for plans of all sizes.

TPAs are a great fit for plans of all sizes with the capability to manage the day-to-day plan responsibilities, which is essential for clients who don’t have employees dedicated to plan management. For larger plans, which tend to be more complex, TPAs offer deep technical expertise to help with sophisticated plan design, compliance consulting and regulatory updates. By teaming up with a TPA to offer these services, advisors have more time to build their practice.

At the end of the day, TPAs are essential partners to advisors and recordkeepers, and provide invaluable, personalized service to retirement plan sponsors and plan participants. Understanding TPAs’ strengths will help new and emerging advisors grow and maintain long-term relationships with clients while enjoying the benefits of having an expert partner in their corner.

Rita Taylor-Rodriguez (Photo: The Standard)Rita Taylor-Rodriguez is TPA sales director at The Standard. She holds the Certified Plan Fiduciary Advisor and Fi360 Accredited Investment Fiduciary designations.


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