To ensure successful administration of retirement plans, each party involved has a role to fill. We believe that the client benefits from having specialists focus only on their field of expertise, with the client serving as the conductor. Below is a general breakdown of each party’s responsibilities.
Plan Sponsor (Client)
Responsibilities:
Ø Overall plan operations
Ø Select a plan design that best meets the company’s objectives
Ø Choose plan’s investment options
Ø Appoint a third party administrator (TPA) to ensure plan compliance with federal qualification requirements
Ø Provide TPA with employee data, contribution information and beneficiary designations
Ø Review plan document, summary plan description and other plan documents with legal counsel
Ø Maintain plan records provided by investment companies and TPA including any cost basis for taxes
Ø Administer the plan in accordance with the requirements of ERISA and tax rules
Ø Communicate plan to employees: distribute disclosure materials; answer employee questions
Ø Make plan contributions in a timely manner
Ø Authorize plan disbursements and forfeiture allocations and ensure accuracy of information provided
Ø Provide TPA and Investment Manager with new enrollee and contribution changes
Third Party Administrator
Responsibilities (TPA) (Compensation Consultants, Inc.)
Ø Prepare Plan and Trust Agreement and Summary Plan Descriptions for sponsor approval
Ø Provide plan specification and design consulting
Ø Furnish IRS filings (annual IRS Form 5500 and supporting schedules)
Ø Determine and maintain record of employee status, compensation and contribution information
Ø Provide participant benefit statements and Summary Annual Reports as needed
Ø Test and monitor for participation: anti-discrimination and contribution compliance
Ø Provide technical support and guidance to Plan Sponsors regarding legislative changes, their impact on the retirement program and provide recommendations for the appropriate modification, if necessary
Ø Assist in administration of spousal right and applicable election /waivers
Ø Calculate vested benefits for plan disbursements and determine forfeiture allocations
Ø Manage loan administration activities including loan amortization, tracking loan payments and withdrawal information
Ø Assist with hardship withdrawal information
Ø Provide timely application of financial transactions
Ø Maintain investment records
Ø Provide fund valuations
Ø Provide standard reports showing fund activity and account balances
Ø As directed by plan sponsor, assist with disbursements and assist sponsor to provide IRS Form 1099R information
Ø Provide IRS Form 5500/Schedule A information as required by regulation
Ø Provide participant counseling, to include: basic education on investment options and rollover options upon distribution
Ø Assist Trustee with plans investment options and monitor goals and liquidation requirements
Ø Provide updated fund prospectus and prospectus supplement(s) to Plan Sponsor
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