Connections for Success



Business Owners: Do You Know who is Servicing Your Retirement Plan and What You are Paying Them for?
Heather Sinclair-Smelley

Often, a retirement plan has a recordkeeper and a Third-Party Administrator (TPA). This is referred to unbundled plan services. Alternatively, one party could function as both, which is known as bundled services.

A recordkeeper would be a company that holds the assets and processes transactions per your request, such as Fidelity, Voya, Transamerica or any other insured financial institution providing trust services.

A Third-Party Administrator (TPA) works with the plan sponsor to ensure the ongoing accuracy of the plan, reduce the time the plan sponsor must spend on plan oversight, meet service and compliance deadlines and coordinate with all parties. TPAs also assure the accuracy and compliance of plan and participant records to remove or reduce any potential liabilities.

This usually includes:

  • Administering required nondiscrimination testing, and outlining any corrective action needed
  • Determining and/or verifying eligibility
  • Calculating employer calculations
  • Reviewing and providing guidance on loans, QDROs and distributions including Required Minimum Distribution (RMD)
  • Reviewing and verifying participant deferrals
  • Reviewing and verifying vested benefits
  • Reconciling each participant account and resolving any other errors associated with participant accounts
  • Preparing an independent review and reconciliation of client census
  • Preparing an independent analysis of client vs. vendor data
  • Providing oversight and monitoring of contributions, reports and fees assessed by the investment company
  • Reviewing plan operations ensure they are following the legal plan document
  • Providing audit support
  • Preparing trust accounting, reviewing, and preparing Form 5500 and its associated schedules

It is not that uncommon to see an employer paying multiple entities for the same services.

As a business owner and plan fiduciary, it is imperative to understand your plan responsibilities and who you are paying for which services. This reduces plan fees, your administrative work and general confusion.

Related Read: Are You or Your Employees Going to Be Eligible for Overtime Pay Soon?

If you would like additional information or have any questions, please contact Heather Smelley  at [email protected] or 312.670.7444. Visit to learn more about our Employee Benefit Plans Services.

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