As a financial advisor, you will need to decide which TPA (third-party administrator) to partner with, when managing your client's 401(k) plan. As you are determining which provider to use, it is important to understand the distinct roles within the plan and how your partnership decisions could impact your client’s experience.
Maintaining a retirement plan for your employees is no easy task. At various points during the year, employers and HR departments field participant questions, help with enrollments, deliver notices and statements, and participate in the distribution process. However, an additional responsibility, and one of the most important, is the collection of data that is used for compliance testing and government reporting. Though all these duties are important, one task drastically affects the outcome of your compliance testing; accurate reporting of all employee information to your third-party administrator. Sound onerous? Not really.
The Department of Labor (DOL) fiduciary rule, delayed from the original April 10, 2017 deadline, expands the ERISA (Employee Retirement Income Security Act) definition of “investment advice fiduciary” so that every financial professional working with retirement plans would be held accountable as a fiduciary of the plan.