Third Party Administration Services:
What is a Third Party Administrator (TPA)?
A third party administrator (‘TPA’) is an organization hired by a plan sponsor to run many day-to-day aspects of retirement plans. These duties include, but are not limited to, maintaining required plan documents, processing loans and distributions, annual non-discrimination testing as required by the IRS, calculating employer contributions and forfeitures, calculating participant vested percentages, preparing required annual reports and the IRS Form 5500s, and keeping up with the ever-changing ERISA laws.
The Pension Studio is a non-producing TPA which means we don’t sell investment products or give any investment advice, essentially making The Pension Studio a retirement plan consulting firm. We work with our financial advisor partners and their clients to design, implement and maintain a successful strategy.
Why use The Pension Studio as your TPA?
The Pension Studio, a non-producing Third Party Administrator (TPA), can assist clients in addressing the complex problems and opportunities in retirement plan design and continuing administration. Specifically, there are four areas where The Pension Studio as TPA can be of assistance: Consultation, Design, Administration and Ongoing Special Services.
- Consultation- The Pension Studio Sales Consultants can help the business owner identify business and personal needs for tax-deferred plans, employee retirement and savings benefits, as well as additional needs like meeting competition in their industry. In this phase, the TPA can gather data on the client’s objectives, employee longevity and other census information, as well as other pertinent knowledge on the client’s business tax and/or cash flow position.
- Design- The Pension Studio will take information collected in the consultation phase to create illustrations specific to the client’s company to provide a series of alternative plan designs for review. Proper retirement plan design is critical in that it needs to be built around the client’s objectives- example: to maximize benefits to the key employees while minimizing cost to the employer. Plan design also takes into account the plan’s operational matters such as eligibility requirements, entry dates, hardship withdrawals, loans, employer contributions, and vesting schedules, all of which have an effect on the efficiency of a plan.
- Administration- The Pension Studio will handle all plan documents, collection of prior valuation reports and government filings, the transfer of assets to a new custodian (if applicable), employee education meetings (in conjunction with the custodian enroller) and employee communication materials. Annually, The Pension Studio will also perform all compliance testing, prepare the annual valuation reports, as well as create and file the Form 5500 and any other necessary DOL filings. The Pension Studio will also calculate vested amounts of participants, handle distributions, prepare all required notices for distribution to employees, as well as answer participant questions regarding the plan.
- Ongoing Special Services- The Pension Studio, upon request, will calculate allocation amounts for discretionary match and/or profit sharing contributions to maximize the key employees. The Pension Studio can also assist the client in handling an IRS or DOL audit, submitting essential materials into a Voluntary Compliance Program, and, if necessary, processing the termination of a client’s plan.
Summary: The Pension Studio assists clients in maximizing the advantages of establishing a retirement plan, while providing special services and attention specific to the client’s needs. A TPA can provide lower costs through Revenue Sharing programs, plan flexibility, personalized service and clear legal compliance for an employer’s retirement plan. Clients benefit from the experience of Plan Consultants who’ve been educated to solve pension plan issues. The high level of specialized collective experience and access to information resources can equate to big savings for an employer and their employees.