Why Your Retirement Plan Administrator Should Be Enrolled – Part 1

June 13, 2012 at 7:20 am Leave a comment

Earlier this week, I discussed the ramifications of violating the law and having a retirement plan lose its favorable tax status.  What if your retirement consultant or third party administrator (TPA) behaves unethically?  Last week, I attended the Enrolled Retirement Plan Agent (ERPA) Conference in DC where the IRS leaders described the responsibilities of those of us subject to their rules of conduct because of our enrollment.  Most individuals administering plans are not ERPA’s.  Many have other designations and our subject to their own organization’s codes of conduct as I was discussing last week.  Many more have unrelated or nonexistent credentials.  I would encourage plan sponsors to inquire as to what standards apply with your service provider.  As pointed out by IRS leaders at the conference, many of the latter two groups may not be aware of it, but if they are preparing government returns or administering plans, they are subject to certain ethics and competency provisions as indicated in the IRS’s publication 470 located on their web site at http://www.irs.gov/pub/irs-pdf/p470.pdf.  The IRS is responsible for enforcement against these individuals.

There are some great unenrolled administrators, but how do you know you are getting the best?  We need the most competent and ethical individuals administering retirement plans.  For instance, with an ERPA, you know that they have been tested and have a strong list of standards they must comply with.  Is it worth taking that chance on someone else?

Thanks for reading and have a wonderful day!   Please be sure to subscribe to my blog and follow me on twitter.


Entry filed under: Ethics, Retirement. Tags: , , , , , , , , .

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

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