Another third-party administrator (TPA) can take over the administration of your defined benefit plan. It is a fairly common process. However, it requires careful coordination.
Many business owners don’t realize that another plan administrator can jump in and administer their plan. But they will likely have some questions and concerns along the way. When dealing with a takeover, the new actuary must gather sufficient information from the previous plan administrator.
In this post, we will discuss the process and point out a few pitfalls. Let’s get started.
Takeover FAQs
Can Emparion take over by defined benefit or cash balance plan?
Emparion does take over solo define benefit plans and 401(k) plans. However, we do not take over group plans with non-owner employees.
Even though we take over plans, there is no guarantee that we will take over your plan. We do not take over plans that are out of compliance or that have added complexity.
Can Emparion also take over my 401(k) plan?
As long as we are taking over your defined benefit plan, we can also take over your solo 401(k). If you’re looking for us to administer only your solo 401(k) plan, we can do that. However, our administration fee is a minimum of $590.
Why does Emparion not take over group plans?
Over our years of experience, we have determined that companies looking for others to take over their group. Plans can often have noncompliance lack of participant statements, and other complexities that will add substantial work on the compliance side. As a result, we are currently not taking over any group define benefit plans.
Do you charge a takeover fee?
We currently do not charge a takeover fee.
What are your annual administration fees for plan takeovers?
Our annual administration fees are as follows:
- Solo defined benefit or cash balance plan is $2,290 annually. If you’d like to add a spouse, it will be an additional $200.
- For solo 401(k) plans, we charge $290 for administration. There is no additional spouse fee.
Must my plan be restated?
Defined benefit plans and 401(k) plans are required to be restated by the IRS every six years. As part of our takeover process, we will restate your plan document. We will not charge you a fee for this.
I understand you can’t guarantee that you’ll take over my plan. How long will it take for you to review?
Once we receive all the requested documents, it usually takes our actuaries five business days to review for compliance. We will let you know ASAP if we can take over your plan.
What documents must you review to determine if you can take my plan over?
The first step is to gather the following documents and send them over to us electronically:
- Plan Adoption Agreement with any amendments
- Summary Plan Description, if available
- IRS Favorable Determination Letter, if available
- Schedule SB for prior two years
- Submitted Form 5500 and Attachments for the prior 2 Years, if applicable
- Actuarial Valuations for the last 2 Years
- Year-End Statement of Plan Assets (Investment Account) for the last 2 Years
- Compensation History for ALL employees for the last 2 years
- Current Employee Census for the prior 2 years
- Sample Benefit calculation, if available
After we receive all the documents, we will need a week or so for our actuary to review everything and check for compliance. If necessary, we will recommend possible amendments to optimize your funding or to maintain compliance.
Can I sign a release and have you go get the documents from my previous TPA?
This typically involves signing a release form that allows the current TPA to share all relevant documentation with the new one.
Do I need to schedule an onboarding call?
Once we agree to take over your plan, we must schedule an onboarding call to introduce you to our process.