What is a TPA or third party administrator? |
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A TPA, or Third Party Administrator, is a company that administers of employee benefit plans for employers (plan sponsors). “Third party” indicates that the TPA is independent from any particular investment fund or other products or services related to employee retirement plans. A TPA’s purpose is to serve clients by assisting with the design of an employee retirement plan that best fits and employer’s/employees’ needs, to prepare the plan document and make amendments to the plan as necessary, to gather information (census data) from the plan sponsor in order to prepare reports required by the Federal Government (Form 5500), to administer loans and distributions from the retirement plan and to provide consultation as needed to keep the plan in compliance with Department of Labor regulations and Internal Revenue Service codes. |
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