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October 19, 2021 at 04:17 PM
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.
Rita Taylor-Rodriguez is TPA sales director at The Standard. She holds the Certified Plan Fiduciary Advisor and Fi360 Accredited Investment Fiduciary designations.