5 keys to quality Third Party Administration
Retirement Plan Design
Whether using a pre–approved document or a custom designed document, the 401(k) Profit Sharing Plan that a company adopts should meet the needs of the company. The company's demographics, the type and amount of contributions that the company wants to make (if any), should be discussed upfront. Eligibility provisions, timing of distributions, and what other features are to be provided in the plan should be outlined carefully and be fully understood before signing on the dotted line.
Retirement plan regulations are complex and ever-changing. You are best served hiring a TPA you can trust to interpret the rules and apply regulations. As your Third-Party-Administrator, we perform a thorough check on your plan to include:
- Who is eligible for the plan?
- Were contributions deposited and posted to your account correctly?
- Were the contributions deposited within the allowable limits?
- Perform necessary compliance testing to ensure no discrimination of contributions or eligibility.
- Were participants paid out of the plan appropriately?
- Participant Loan calculations and monitoring
A retirement plan is a tax–exempt trust. We prepare a set of annual financial statements for the retirement plan (trust) — as well as employee eligibility reports. In order to prepare these financial statements, we verify and validate all deposits and withdrawals. We compare the company's records to those of the trust account to validate there are no discrepancies or variations between the two sets of information. Having an independent review of the trust activity provides the company with an additional layer of protection and comfort.
A lot happens while a participant is in the plan, but it all starts with enrollment and ends with their distribution. Transactions we document include determining a date on which a new employee can enroll in the plan, assisting in processing loans and hardship withdrawals, making corrective distributions to bring the plan into compliance, and more.
Don't miss the deadlines. Retirement plans must provide the government with an annual Form 5500. If a plan has more than 100 participants, audited financials must also be submitted. Distributions paid to participants must be reported on Form 1099–R. As your TPA, we will help you meet all of these deadlines.