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Your Qualified Plan Administration is Too Important to Bundle

November 17, 2014

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The benefits of working with an independent TPA vs. bundling services

One-stop shopping can be great for things like groceries, but it’s not always the best approach when purchasing qualified plan administration services.

Many large organizations offer plan administration as an option to clients who wish to bundle their services. While this may sound like a convenient proposition, using an independent Third Party Administrator (TPA) is often the better way to manage a qualified plan in the long run. Here’s why:

Expertise and Attention to Detail
Qualified plan rules are very technical and complex. Independent TPAs have the specialized knowledge and expertise to understand and apply plan rules and regulations to ensure compliance and minimize liability. Large organizations that offer multiple services tend to have their expertise thinly spread across a number of functions, and can easily overlook some of the details specific to administration. Independent TPAs, like CSH advisors, focus solely on retirement plan design, administration and consulting, and do it year round. This helps ensure that you’re being informed of – and potentially benefitting from – the latest rules and regulations that affect your plan. This attention to detail is what will help keep you in compliance.

Customization and Transparency
Independent TPAs approach their role objectively, and are nimble enough to create solutions tailored to your specific needs. Many large companies apply a one-size-fits-all approach when they bundle services. Also, bundled services often mask hidden fees that may end up costing you more than if you worked with an independent TPA. Although going with bundled services may seem easier and cheaper at the outset, working with an independent TPA can provide peace of mind and a better ROI in the end.

True Independence
Independent TPAs can offer conflict-free advice because they are unaffiliated with any investment advisor, custodian, record keeper or product line. In fact, independent TPAs offer a competitive advantage because they will periodically evaluate and benchmark all plan service providers against the current provider. Most companies who offer bundled services are unlikely to evaluate themselves and recommend a competitor.

Ultimately, you should look for a firm that:

–        Has knowledgeable experts who focus on qualified plans

–        Is transparent about the services they provide and the associated fees

–        Provides customized solutions, as well as excellent service and advice

–        Has you and your business’ best interests in mind

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a Clark Schaefer Hackett professional. Clark Schaefer Hackett will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.

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