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Choosing a third party administrator (TPA) is no easy task, whether you’re implementing a new retirement plan or transitioning over to a new firm. There are almost as many factors to consider as there are plan options and, unfortunately, there’s no quick reference guide to tell you which considerations are the most important. However, there are a few questions you should ask your TPA as you’re going through the decision making process.

Do you specialize in certain sized companies and plan designs?

Every business has an area of expertise and TPAs are no exception. There are some that target smaller companies, while other TPAs aim for larger enterprises with plans of over $5 million in assets. The type falling into the second category might charge such high administrative fees that they’re not cost effective. At the same time, the focus on different plans is a consideration. Some TPAs offer defined benefit options, while others have more expertise in 401(k) or other types of retirement planning.

What training and experience do you have in handling retirement plans?

Experience and education are critical factors, so make sure to ask about the qualifications of the individuals employed by your TPA. Many require their personnel to earn proper credentials from industry groups or maintain affiliations with professional organizations. Find out all you can about the people who will be handling your retirement plan.

What are some of the key services and features you offer?

Piggie Bank with Flying Money Small.pngTPAs provide a variety of services, but you must make sure these offerings fit the needs of your company. For instance, an easy to navigate website that allows employees access to plan details is essential. You also may want a one-on-one relationship with a specific plan administrator rather than rely on a team. Many times, having a single point person is beneficial because he or she knows your plan details and is well aware of your company’s needs and objectives.

Do you have your own asset advisory team or rely on external sources?

While a one-stop shop for the administrative, legal and financial elements of your retirement plan seems like a wise decision, this type of relationship with a TPA offers potential for abuse. The problem is the lack of checks and balances: If you hired a TPA, a legal adviser and financial experts separately, each would keep an eye on the others. For this reason, ask whether your TPA engages in providing financial services. You might be better off with one that strictly focuses on plan administration and lets others handle the financial aspects of a retirement plan.

What are your fees?

Clearly, you’ll need to know what your TPA will charge for its services, so ask for an itemized list and make sure you understand the terms and conditions. If certain costs are vague or confusing, ask for clarification. Specifically, ask for the base fees, per-employee charges, conversion costs, termination penalties, plan document fees and other items. You don’t want to be caught off guard when you receive paperwork showing charges you’re unfamiliar with.

Hopefully, the answers to these questions will help you narrow down you choices and find the right TPA for your company. At Paypro, retirement solutions feature the flexibility and data integration you need, as well as the top notch service you can trust.