Working with a third party administrator (TPA) can take a lot of stress off your plate, but how do you know which one is the right one? There are a variety of characteristics to consider and the list can actually become pretty daunting. So we’ve done some of the research for you and cut the list down into something a little more manageable. Keep reading to discover the four most valuable traits to consider when determining whether a particular TPA is right for you.
Read Also: Exploring The Benefits Of A Plan Sponsor-TPA Relationship
1. Custom Plan Design
The days of a one-size-fits-all approach are no more. When scouting a TPA find out what they will do to identify your client’s specific challenges and how they will use that information to formulate a strategic plan of action. You want your TPA to be invested in your client’s success, which means you need them to take the time to get to know you, the plan sponsor, and the sponsor’s plan participants.
2. Personal Service
Once you have a pretty good idea about what a particular TPA has to offer, take a minute to find out what they will do with the information they collect after it’s been gathered? After getting to know a little bit more about your client and their employees, a TPA should be able to identify which services will make the most sense. The personalization of service between a TPA and plan sponsor will result in the creation of a creative plan design that will help maximize benefits.
3. Local Service
These days, plan sponsors aren’t just looking to customize their plans; they are looking to build a personal relationship with their service providers. So, when you are out scouting, consider which TPAs on your short list are local or, at the very least, which TPAs make an effort to regularly meet face-to-face with their plan sponsors. This close-knit relationship helps you ensure that the TPA is engaged in your client’s success and that they are delivering trustworthy service.
4. More Control
Working with a TPA who readily provides you and your client with key industry trends, plan insight and employee data is absolutely critical to ensuring that all parties are fulfilling their fiduciary responsibility. When it comes to compiling this vital information, a TPA shouldn’t be happy providing you with the bear minimum. They should provide all the information needed to make the best decision possible for the plan sponsor and the plan’s participants. If they don’t, consider moving on.
Whether your client is in the market to hire their first-ever TPA or they are looking for your opinion on whether their existing TPA is up to snuff, this list should help point you in the right direction. After all, working with the right TPA can make your client’s life a lot easier. Working with the wrong TPA won’t only make a plan sponsor’s job a lot harder, it could open them up to the fees, penalties and lawsuits that can arise from failing to meet their fiduciary responsibility … and you can be pulled into any litigation that arises as well. Email Rea & Associates to learn more.
By Paul McEwan, CPA, MTax, AIFA (New Philadelphia office)
Check out these articles for more insight into the true value associates with the plan sponsor-TPA relationship:
Retirement Plan Sponsors: Do You Know What You’re Paying For?