Is A 401(K) TPA Right For Your Company?
Overseeing your company's employee benefits package is a time-consuming job that can be overwhelming for some. Many companies turn to a 401(k) third party administrator, or TPA, to help oversee certain aspects of the package. If you are considering using a TPA, here is what you need to know.
Why Should Your Company Use a TPA?
There are several benefits of using a TPA, but one of the most beneficial is that the TPA will have extensive experience with money management. The administrator's experience will be particularly useful during tax time and when making decisions about investments.
TPAs can also be useful in helping your employees determine what their financial goals are and what they can be doing now to achieve them. Every aspect of your employees' future, including saving and planning, can be mapped out by the TPA.
Hiring a TPA helps to free resources that you and your employees would have otherwise diverted into managing the employee benefits packages. With the help of a TPA, you and your employees can focus on other matters, such as managing your business.
What Should You Look for in a TPA?
Before you begin your research to find the TPA that can provide the services you need, you first need to determine exactly what you want the TPA to do. TPAs are skilled in various areas and you want to be sure that you find one that fits your particular needs. For instance, some TPAs only focus on managing 401(k) retirement plans, while others might manage those and also health care.
Finding a TPA that is up-to-date on laws that affect retirement benefits is important. There are laws that regulate how your company has to administer employee benefits packages and if you are not in compliance, your company could face serious consequences. Ask about the steps that the TPA takes to ensure that everyone who will be involved in managing your account is current on the applicable laws.
You also need to know how the TPA plans to manage your account. Legally, the TPA is supposed to function in a prudent manner when managing accounts, but you want to be clear on what the TPA considers to be prudent. One safeguard that the TPA should offer is an audit report that details the way that your account is managed.
Using a TPA can be beneficial, but only if you take the time to find the right one. Carefully review your choices before making a final decision.
For more information, you will want to contact a company such as Uniglobal Pension Planning LLC.