Retirement Plan TPA Internal Controls Part II

October 29, 2012 at 4:17 pm Leave a comment

Internal controls are important to me because they help reduce fraud and errors. Does your retirement plan third party administrator (TPA) have proper internal controls?  Your TPA will be handling confidential employee information and financial data.  One of the controls that should be in place are the establishment of responsibilities controls (Kimmel, P., Kieso, D., and Weygandt, J.  Financial Accounting: Tools for Business Decision Making, 6th ed.  (2011).  Danvers, MA:  John Wiley & Sons, Inc., pp. 344).  As a consumer, I feel it is imperative that you check these controls when choosing a TPA.

Does your TPA have a listing of who will be handling what for your plan?   For example, do you know who amends your document, performs distributions, processes loans, prepares government forms, or does testing?   If all the TPA hands you is a vague organization chart with only names and titles, that may be a warning sign.   A TPA should be able to tell you who will do what for your plan.   TPA’s that do not have established responsibilities may miss an essential government filing or some other function.  It is essential that you also know who is doing what aspect of the job in order to confirm their qualifications and quality.

I discuss more on determining TPA qualifications in my book, A Short Guide to Finding a High Value, Low Fee Third Party Administrator (TPA) for Your Retirement Plan, available at and My goal is to help plan sponsors make the best decision they can when selecting a  TPA.  I understand how difficult a decision this can be when you do not know what skills and credentials to look for.  I have created this book to ease the process and enable plan sponsors to make good choices through my insights from working in the industry.

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

I am not selling my own or any one else’s TPA services through this blog or my book.

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Retirement Plan TPA Internal Controls Part I Excessive Fees in Retirement Plans

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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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