Retirement plans aren’t exactly the topic that gets airtime at brunch or steals the show in group chats. But if you’re an employer with a retirement plan—or someone thinking about starting one—it’s time to meet your new BFF in the retirement planning world: the Third-Party Administrator, or TPA.
So, what exactly does a TPA do, and why should you care if your business needs one? Pull up a chair, and we’ll walk you through it.
What is a third-party administrator (TPA)?
A TPA manages the nitty-gritty details of a company’s retirement plan, making sure everything runs smoothly and follows all required rules and regulations. They handle a whole host of tasks that would make most (normal) people run screaming—for example:
- Compliance Testing: Ensuring retirement plans follow all Internal Revenue Service (IRS) and Department of Labor (DOL) regulations (because no one wants the IRS knocking at their door).
- Plan Design: Helping employers create a retirement plan tailored to fit their company’s size, structure, and budget.
- Annual Reporting: Handling government forms and filings like the Form 5500 – a must-have for keeping a retirement plan in the good graces of the IRS and DOL.
- Contribution Calculations: Keeping track of how much everyone (employers and their employees) can save in their plans, as well as setting up the right contribution formulas.
And more! Don’t worry, if even reading the words “compliance testing” made your eyes glaze over, we get it. That’s where a good TPA comes in (COUGH COUGH – EGPS!). They take care of the math, regulations, and paperwork so employers don’t lose sleep over it. They also love this stuff and live for the complex work ahead of them each day!
But wait, don’t recordkeepers or advisors do that?
Here’s one of the most common misconceptions regarding retirement plans: Plan sponsors often think their recordkeeper (the company that tracks participant data) or their financial advisor (who provides investment advice) is doing these specific plan management tasks. Spoiler alert: they aren’t.
While recordkeepers and advisors play essential roles in the retirement ecosystem, the TPA is the one deep in the trenches ensuring the plan stays compliant and customized for the employer’s needs. Without a TPA, employers left trying to glue all the pieces together themselves—and trust us, that’s not how anyone wants to spend their Friday afternoons.
So, how do I find the right third-party administrator?
We’re so glad you asked! It’s not just about finding a TPA that can crunch the numbers—it’s about so much more. When looking into a TPA, employers should be sure to ask:
- What types of plans are they familiar with/do they administer?
- Do they offer ongoing support or just annual services?
- How do they keep data secure?
- What does their customer service model look like?
These are just a few of the questions we recommend asking. Check out our full post on this topic (Finding the Right Third-Party Administrator) to see them all. Key takeaway? A little due diligence now can prevent headaches down the road.
How EGPS can help
Whether employers are setting up a shiny new 401(k) for their business or managing an existing plan, a TPA isn’t just a nice-to-have—it’s a need-to-have. And while we’re surely biased, EGPS is a great choice. We keep plans running like well-oiled machines and help both employers and employees reach their financial goals while ensuring the plan meets its requirements. Here are just a few benefits of choosing EGPS:
- Retirement plan experts around the corner and across America. Our biggest differentiator? The fabulous professionals at EGPS, available across the U.S. We provide clients with one dedicated Retirement Plan Consultant to ensure they receive the support they deserve, backed by our ensemble of ERISA compliance experts, enrolled actuaries, and operations professionals.
- Customized, industry-leading retirement plan services. Every business is different, and so are its employees. Therefore, we work side-by-side with employers to design the plan that best fits their organization. We help employers save more, reduce taxes, and attract and retain employees through customized retirement plan solutions. Below are the types of plans and services we offer.
- 401(k) profit sharing
- Defined benefit/cash balance
- MEP aggregated
- Non-qualified
- Prevailing wage
- 403(b) ERISA and non-ERISA
- Tribal
- 457(b) & 457(f)
- 409A
- 3(16) fiduciary services
- Compliance consulting services
- Actuarial consulting
- Industry-leading 3(16) fiduciary services. We mentioned it above, but it’s worth noting because honestly, these services are crazy good, and the value can’t be overstated. Managing a retirement plan can be complex, but EGPS 3(16) fiduciary services simplify the process for plan sponsors. By taking on the critical administrative and compliance responsibilities, we help employers save time, reduce risk, and ensure their plan operates efficiently.
- Happy clients. At EGPS, we want to join clients’ teams and consistently exceed their expectations. We pride ourselves on keeping clients happy. Check out some of their experiences.
We could probably go on and on (our cybersecurity practices, the value of our ERISA compliance experts, our amazing team of in-house actuaries), but no one likes someone who only talks about themselves. We’re here for our clients. Running a business is hard enough without micro-managing a retirement plan. By partnering with EGPS, employers free up time to focus on growing their respective companies—and letting our experts take on the technical stuff.
