Third Party Administration

A Third Party Administrator (or TPA) is an organization that is hired by the company to run many day-to-day aspects of your retirement plans. These functions are compliance and administrative in nature. The main function is to make sure that plans stays compliant and do not run into trouble with the IRS and Department of Labor (DOL).

Cash balance plans, defined benefit plans and 401k plans are required to be maintained by a TPA. However, TPA responsibilities and fees will vary depending on what type of plan the company has. These responsibilities include, but are not limited to:

  • Establishing, amending and restating plan documents;
  • Filing Form 5500s (as applicable) with the IRS and Department of Labor;
  • Preparing employer and employee benefit statements;
  • Providing all actuarial calculations for defined benefit and cash balance plans;
  • Assisting in processing all types of distributions from the plan;
  • Preparing loan paperwork for plan participants;
  • Testing the plan each year to gauge its compliance with all IRS non-discrimination requirements as well as plan and participant contribution limits;
  • Calculating the allocation of employer contributions and forfeitures;
  • Calculating participant vested percentages; and
  • Monitoring IRS and DOL compliance.
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