What is a Third-Party Administrator
A Third-Party Administrator, or TPA, is an organization that employers engage to assist with the operation of a retirement plan. The TPA ensures that the employer’s plan conforms to the rules and regulations governing 401k, 403b, Cash Balance, Defined Benefit and other types of qualified plans. TPAs manage many day-to-day aspects of an employer’s retirement plan.
Here at SPS, we provide services to minimize the time plan sponsors must spend on plan oversight by meeting compliance deadlines and coordinating with other professionals engaged by the employer. TPAs often also maintain participant and plan records including:
- Eligibility
- Employer Calculations
- Loans, QDROs and distributions including Required Minimum Distribution
- Participant deferrals
- Vested benefits
- Reconciling participants accounts
- Independent review of plan sponsor census data
- Independent analysis of reports prepared by investment company
- Plan operations review to ensure compliance with the Plan Document
- Audit support
TPAs perform the compliance testing for retirement plans as well. These tests are mandatory and complicated. If an issue arises during testing, SPS will provide a range of solutions to correct the issue.
As a full service TPA, SPS will tailor and maintain the plan document to ensure the plan sponsor remains in compliance with any changes to the law or regulations governing the plan. SPS regularly reviews the plan to determine if it is operating in accordance with the plan document, and if not, makes appropriate recommendations to bring the plan into compliance.
