By hiring a TPA, a plan sponsor is basically outsourcing the government regulated compliance requirements. Technically, a plan sponsor could do this work themselves, but doing so would not be an efficient use of their time.
What is the difference between a Plan Administrator and Plan Sponsor? Many times the Plan Sponsor and the Plan Administrator are the employer sponsoring the plan. However, an employer may appoint a specific person to be the Plan Administrator. This person is typically an employee of the employer.
Ultimately, the Plan Administrator and Plan Sponsor are responsible for the compliance portion of the plan such as form filings, employee communications and testing requirements. The Department of Labor and IRS require that the Plan Administrator sign the Form 5500. However, it is not a requirement that the Plan Sponsor sign it.
We hope that you will choose Crest Retirement for your TPA services. Although we may not always be the right fit, we hope that we can at least help you in your decision making process.
Choosing a TPA is essential to your plan’s success. Be sure to ask the following to your TPA:
- How long has TPA been in business?
- Costs for administration, Form 5500, setup/conversion and plan document
- Do they have anyone who is designated as an Enrolled Retirement Plan Agent with the IRS?
- What other designations does staff have?
- What services do they offer regarding IRS or Department of Labor plan audits? At what cost?
- Do the TPA’s fees and services include a complimentary annual planning meeting?
- Request for a copy of Errors & Omissions policy
- Ask for 3 references