Third Party Administrators develop custom retirement plans for your business. Unless you own a large company with the appropriate personnel, you should hire a retirement plan TPA to handle your employee 401(k) plan. Their expertise helps ensure that your pension plan grows and provides a real benefit to your employees.
Take your time in selecting a 401(k) Third Party Administrator; you want to find a pension TPA with which you can establish a long-term business relationship. After all, you're talking about your employees' financial security. Expect to go through these phases when working with a Third Party Administrator:
1. Consult with the TPA about your needs for tax-deferred plans and employee retirement and savings benefits.
2. After the consultation, ask the pension TPA to provide you with a proposal of the types of plans suitable for your company. Ask to see all provisions, including penalties and vesting schedules.
3. After selecting a 401(k) Third Party Administrator, they will get IRS approval of your plan, provide all necessary employee paperwork, and work with you to get your employees enrolled.
Action Steps
The best contacts and resources to help you get it done
Work with one of the larger, national pension TPA companies
You've probably seen insurance companies advertising their retirement plan services on TV. With a large company you get experience and expertise. However, you may also end up with a larger bill for plan administration.
I recommend: CitiStreet is one of the top companies in benefits administration.
ADP Retirement Services offers a full service retirement plan TPA.
Choose specialized retirement administrators
Some companies work solely in Third Party Administration. With one of these smaller companies, you often have more options in selecting a 401(k) provider.
I recommend: Pension Specialists offer a variety of services including their flexible 401kMAX plan. Look to
CompuPay for expertise and a wide range of retirement plan third party administration services.
Look for Third Party Administrators who do business in your state
The Internet makes it easy to locate a list of Third Party Administrators which are licensed in your state. You can do a quick comparison online and then call only those companies that offer the services you need.
I recommend: The
401kExchange provides a provider directory and ratings of plan providers. The information is free but you'll need to register with the site to access the lists.
TPA Connection allows you to search by state. Click on your state and a list comes up showing Third Party Administrators who do business in your state; the list includes how long the company has been in business and a guide to the services they provide.
Tips & Tactics
Helpful advice for making the most of this Guide
- Once your Third Party Administrator has all the paperwork for your plan, you should ask your company attorney to review all documents.
- Don't think 401k TPA is only for large companies. Many retirement plan administrators work with companies with as few as 25 employees.
The official source of Third Party Administrators is
the Third Party Administrators page at Business.com
Related Resources from Business.com
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