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The retirement industry is, to put it mildly, confusing. There are so many acronyms (ERISA, EPCRS, AFN, SPD, BPD, TPA… QSLOB, anyone?) that keeping up can be daunting. As a TPA, we value our partnership with CPAs as a way to bring clarity and work towards processes and outcomes that are easy and valuable for our retirement plan clients.
TPAs can help navigate both what the law says and how a given plan works in practice. A TPA looks at plan operation and administration against the plan document language to verify they correspond and that all falls within the complex legal and regulatory framework surrounding benefit plans.
After consulting and obtaining the needs of the plan sponsor—including their tax goals as discussed with you—a TPA can generate a prototype plan document with supporting documentation, while also ensuring that any amendments are timely adopted.
Eligibility can hinge on several factors like age or classification. With recent SECURE 2.0 legislation, for example, any eligibility exclusion based on service was eliminated with long-term part-time employee legal and regulatory changes. TPAs can help design a plan to meet plan sponsor needs and keep it updated for changes in the law.
RMDs and hardship distributions have had several changes over the years and other distributions, mostly optional, have been offered through SECURE 2.0. A TPA can describe those features and help the plan sponsor assess whether adoption would meet the needs of the sponsor and employees.
Some plans don’t offer loans, while others may offer them but with conditions. Conditions—like limits on how many outstanding loans a participant may have, or which benefit accounts are accessible when taking a loan—must be monitored and a TPA can do that for you. Additionally, there are notices and forms that must be provided to participants when they take a loan and the TPA can generally generate the amortization schedule and other forms.
Most plans have annual notices—like safe harbor notices, automatic enrollment and contribution escalation, fee disclosures, SMMs detailing plan amendments, COBRA notices, etc.—that must be distributed and documented.
Every ERISA plan has mandatory tax reporting that must be done annually. Depending on the number of participants, an independent audit (by CPAs like you!) and other forms may be required to be filed alongside the 5500. A TPA can generate those forms.
When searching for a recordkeeper, payroll provider, investment advisor, or other vendors, a TPA can help you collect RFPs and review the pros and cons from each submission. ERISA requires plan fiduciaries regularly perform RFPs to ensure they are getting the best, most reasonably priced service for the plan’s assets.
During mergers, acquisitions, or plan termination. There are plenty of moving parts during transactions and a TPA can be a great asset, including providing general advice about how such corporate transactions may impact plan compliance matters.
Hannah Munn
Partner, Poyner Spruill
Hannah’s practice is focused in the areas of Employee Benefits and Executive Compensation. She works with business owners and HR executives to understand and manage employee benefits and executive compensation arrangements. She routinely represents clients before the Internal Revenue Service, Department of Labor, and Pension Benefit Guarantee Corporation and has extensive experience in virtually all aspects of employee benefits.
Contact Information:
949-223-8397 | www.planperfectretirement.com
