Under new regulations, employers assume a more active role monitoring and managing their plans. With new administrative duties and a trend toward vendor consolidation, TPAs and advisers to 403(b) plans will likely be asked to help sponsors search for providers.
RRI cited an ASPPA survey of third party administrators, conducted in 2010 by Brightwork Partners, that suggested 403(b) plan administration could be a major growth focus for TPAs in the next two to three years (see “TPAs Expect Major Growth Opportunity in 403(b) Market“). TPAs currently collaborate with plan sponsor’s existing 403(b) vendors/providers; they typically provide administrative, compliance, and communication services, including all important data aggregation and legacy asset tracking.
RRI contends that as compliance and data collection get more complex, both providers and sponsors are looking to TPAs for help with participant recordkeeping, prototype plan documents, summary plan descriptions, nondiscrimination testing, Form 5500 preparation, Web-based transactions, loan processing, and hardship determination. TPAs can offer these services on either a fully unbundled or TPA interface basis.
Additionally, common Remitter platforms were created by some TPAs and service providers to service the growing number of Employee Retirement Income Security Act (ERISA) 403(b) plans.A full report can be purchased here.