RPA: "Super TPA"
The "Super Bowl" is not just a typical football game.
A "Super TV Station" is not just a typical television station.
In retirement planning, a "Super TPA" is by no means just a typical third party administrator.
RPA is a "Super TPA"
"Super TPA" is a term-of-art reserverved only for those providers of retirement plan support that meet the highest standards of retirement plan compliance administration, AND also provide their clients with a diversified, flexible and powerful recordkeeping function.
The typical third party administrator [TPA] is employed by a plan sponsor to insure that their retirement plan at all times complies with the complex federal rules and regulations that govern retirement plans.
Traditional TPAs however, do not always act as the recordkeepers of the complicated and finite financial details of the retirement plans that they administer. They are typically just not equipped, technically or otherwise, to manage level the of responsibilities involved in recordkeeping the intricate financial details of a retirement plan and those of each of its plan participant accounts.
Over three decades of service, RPA has distinguished itself as a "Super TPA", by providing a national base of clients, large and small, with the consummate in retirement plan compliance administration services, as well as one of the most sophisticated recordkeeping support functions available anywhere. RPA maintains this distinctive "Super TPA" standing by continuing to provide its clients with the following:
- A National Presence & Client Service Capability
- State-Of-The-Art Computer Hardware And Software Technology
- Maximum Investment Diversity By Multiple Mutual Fund Family Trading
- Accredited Pension Professional Staff
- Superior Plan Sponsor & Plan Participant Support
- Exemplary Client Loyalty & Retention
- Internet & Telephonic Toll Free VRU Plan Participant Account Access
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The Cost Of Imperfection
Anything less than perfect performance by your TPA can be a very expensive distraction to your retirement plan and your plan's participants. Not only are there direct expenses that could result from your TPA's failings and imperfections, but also there is the loss of employee productivity and valuable management time in dealing with such problems. This can become very unsettling for an employer plan sponsor.
What is the cost in dollars and loss of staff productivity in trying to get your retirement plan back "into compliance", due to a less than adequate performance by your TPA? How costly is it to a Human Resource Officer and his company when their HR office is inundated with complaints from unhappy employees resulting from inaccuracies that they have found in their personal retirement plans accounts?
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The "Super TPA" And The Successful Retirement Plan
To maintain the most successful retirement plan, a plan's sponsor must sensibly blend well-chosen and solid mutual fund investment options, with proficient compliance administration and timely, accurate recordkeeping. Selecting a "full service" Super TPA keeps your compliance administration and recordkeeping services under one roof. Accountability and performance for these important services are easily monitored and you never have to face the excuse that "the other guy made that mistake" as you might if you have two separate parties delivering these services. Your TPA should employ an experienced and accomplished staff of pension professionals and they should be equipped with state-of-the-art computer hardware and software.
Sounds simple doesn't it?
Well, just how simple is it?
For the typical plan sponsor, choosing the right investments for their plan is often the easiest task. In today's market, there is a plethora of mutual fund investment research information available, and an overabundance of investment advisors capable of offering decent investment advice.
However, exactly what are your choices in choosing the right TPA to support your plan's mandatory need for compliance administration and recordkeeping? How can you be sure that the TPA that you select will keep you from facing the pitfalls of any potential fiduciary liability?
It would appear that there are a countless number of companies from which you may choose your plan's TPA. Unfortunately, in truth, the actual sources from which these many choices originate for you are actually quite narrow.
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Mutual Fund Sales Companies Often Provide "Add-On" TPA Services
One source of TPA services is from the company whose primary business is the sale of mutual funds, but, who also offers TPA administration as an "add-on" service.
The problem is that their core business and primary source of revenue is from the sale of mutual funds, not providing TPA services, and a closer look at their business model and profit motive clearly reflects that imbalance.
Compared to the revenue returns earned from its mutual fund sales, a mutual fund company realizes little comparative return in providing their clients with TPA compliance administration and/or recordkeeping. This reality is seen when a mutual fund company who also provides "add-on" compliance administration and recordkeeping agrees to provide those services at little or no charge, if you agree to only buy their funds. Providing these services is just another way of promoting mutual fund sales. It is for this reason primarily that mutual fund companies often are not prone to investing the time, manpower and money needed to seriously develop and manage the TPA administration component of their business and why the quality of their compliance administration sometimes suffers. It is also why in recent years mutual fund companies have chosen to disband their plan administration divisions and "exit" this segment of the industry.
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"No-Fee" or Free TPA Services Can Be Very Expensive
For very large plans, those with many millions in assets under management to invest in mutual funds, mutual fund sales companies will often agree to provide their "add-on" TPA services for "free". This offer is almost always subject to a commitment that the plan's assets must stay invested exclusively in their mutual funds. This "free" TPA service may also carry the caveat of a multi-year "separation penalty", which penalizes the plan should the plan sponsor choose later to take their plan's TPA business elsewhere within the time period covered by the "penalty".
As always, you pay for what you get.
Be assured, "no-fee" in this regard is not the deal that it appears to be at first blush. Larger plans, those with millions of dollars in assets under management and with large numbers of participants, demand an even higher standard of compliance administration and recordkeeping support, than the smaller plans. Due to the sheer volume of participants and the significantly increased number of transactions that are generated in a large plan, there is an even broader opportunity for error and hassle if the compliance administration and recordkeeping services aren't the best and most objective available.
Many large plan sponsors have learned the hard way that even though a mutual fund sales company can offer their plan some really sound mutual fund investment opportunities, that the "household name" recognition that these companies have earned through providing great mutual funds and by way of national TV advertising campaigns, does not necessarily translate into a competent and error free source of TPA services. This is understandable because compliance administration and record keeping is simply not their core business nor is it their core competency.
To the contrary, small plans [low seven figure or less in assets] or new start-up plans often find that mutual fund sales companies who also provide TPA services, usually have little or no interest in providing their plan with TPA services and will place very restrictive qualifiers on the amount of assets that the plan must have before they will agree to provide such "add-on" services, if at all. It's just not worth their time because these companies draw the majority of their revenues not from TPA services, but from the sale of mutual funds.
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Local And Regional TPA Services
Another source of TPA services is the local or regional TPA.
Though many of these companies are reputable and industrious, they often operate behind today's technology power curve. Due to these technological and logistical support limitations, these TPAs are often limited to providing their retirement plan clients with an older vintage, quarterly, "balance forward" recordkeeping system, instead of the current, more widely desired "daily valuation" recordkeeping system.
Unfortunately, unlike the state-of-the-art "daily valuation" retirement plan recordkeeping system, "balance forward" recordkeeping exposes plan participants to potential downside financial inequities due to market swings at the time of distributions. "Balance forward" accounting exposes a plan to the potential of very costly and frustrating errors and the attendant risk of exposure of liability to the plan's Trustees. It requires the expensive ongoing need for additional, unnecessary and time-consuming "hand work" of the employer's HR department. And, because accurate distributions to participants often take many weeks after notice of such distributions, "balance forward" accounting places the plan's fiduciaries at the possible risk of litigation in the wake of negative market swings while such distributions are pending.
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The "Super TPA" And your Retirement Plan
As a "Super TPA", RPA not only provides its clients with forward thinking competent compliance administration, but it also provides state-of-the-art "daily valuation" plan recordkeeping. RPA does not sell mutual funds, or any securities for that matter. RPA doesn't sell or provide any investment advice. RPA has stayed focused on its core business for over 30 years and has been rewarded with a level of client retention and loyalty second to none.
As a "Super TPA", RPA's clients may select their plan's mutual fund investments [typically 12 to 15 funds per plan] from a "super" collection of literally thousands of diversified mutual funds from over 350 competitive mutual fund families.
As a "Super TPA", RPA employs the most current, state-of-the-art computer hardware and software. The use of such first class equipment and software allows RPA to provide its clients with a daily valuation recordkeeping that can be reviewed or modified by their plan's participants 24 hours a day 7 days a week by access either at RPA's Internet website or toll free telephonic voice response unit (VRU).
In RPA's "Super TPA" environment, our team of certified pension professionals are always kept current with retirement plan compliance requirements in the industry.
Learn more about RPA's "Super TPA" business model and how it might serve your organization's retirement plan, give us a call at 1.888.689.5530 ext. 223 or email us at info@retirementplanners.com.
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