Why you shouldn’t hire your payroll provider as your TPA
Payroll Providers serving as your TPA may initially save you money but what you save in money, you might lose in value.
Why you shouldn’t hire your payroll provider as your TPA:
Payroll administration and 401(k) administration have nothing in common, aside from plan referrals being deducted from payroll. In fact, many of these payroll providers service the payroll needs for TPA Pension Consulting companies. If 401(k) administration and payroll administration were one in the same, why would Pension Consulting firms hire a competitor for their payroll services?
Ary Rosenbaum, ERISA Attorney writes a compelling article in one of his most recent e-mail campaigns describing why it’s best to avoid hiring your payroll provider as your TPA.
“One of the reasons Henry Ford was so successful with the assembly line production of the Model T was that he gave consumers very little choice. From 1914-1926, drivers could have any color Model T as long as it was black. Payroll provider TPAs have their own assembly line of plan administration as they offer very little choice to plan sponsors.” The article continues, “Retirement plan administration isn’t paint by numbers and there is no assembly line way of administering retirement plans. One-size fits all does not work with every 401(k) plan because every employer has different employee demographics and financial resources.” You can read the full article here.
TriStar offers value.
TriStar Pension Consulting offers valuable services in a very niche market. They choose not to offer investment products or payroll services because their sole focus is on designing a plan that can best suit the needs of each client and administering that plan to its fullest potential.
What TriStar can do for you:
Save Time– When you call TriStar you know that you will speak directly with one of our seven staff members, there won’t be a chain of departments to transfer you to.
Plan Corrections- TriStar can assist in finding and correcting former plan mistakes.
Plan Updates– Laws and regulations change frequently and TriStar will design and update a plan that reflects these updates.
Filing Forms– TriStar ensures 5500 and 1099 forms for participants are filed properly and timely.
Pass Testing– Plans are thoroughly reviewed to pass ADP and ACP discrimination testing mandated by the IRS. A retirement plan must pass testing in order for the plan to continue.
Save Money- Payroll Providers typically don’t review the forms which a fiduciary completes. TriStar will confirm all paperwork is accurately completed to avoid any discrepancies that might cost you money in the long run.
Reduce Liability- TriStar works hard to prevent an audit from the IRS or Department of Labor but in the case it does occur, TriStar is there to complete an audit with you, never leaving you out in the cold.
Annual Reporting-– TriStar will prepare Summary Annual Reports for participants each year and handle monetary distributions and loans if a participant should be terminated.