The Lancaster Intelligencer Journal reported that school officials are not accusing the company, Gatekeeper Administration and Consulting, of intentional wrongdoing and said they are not aware of any misappropriation of funds. The officials said Gatekeeper, which has contracts with 13 county districts, has delayed depositing employee contributions in designated 403(b) retirement accounts for days or weeks at a time because it cannot keep up with demand for its services.
A teacher, who notified the school district of the problem, said he recently checked on his account and found that only one of his five contributions had been deposited. “The (stock) market was at its lowest in January and February, so that was a great time to buy,” he said, according to the Intelligencer Journal. “Now it’s up 14%, and I’ve lost out on those gains.”
The district has stopped sending employee contributions to Gatekeeper and now sends them directly to individual retirement accounts, as have most of the 12 other county districts that contracted with Gatekeeper.
Not an Isolated Case
Flip Steinour, Lancaster-Lebanon Intermediate Unit 13 human resources director, pointed out that Gatekeeper is not the only third-party administrator having problems. “I have contacted my colleagues across the state, and most of them said it’s going horribly,” he said in the news report.
Steinour said demand for the services of TPAs is outstripping their ability to deliver as a result of new 403(b) regulations in effect January 1.
“There’s probably less than 10 of these companies in the U.S., and you’ve got every school district in the United States needing their services,” Steinour said. “They’re having growth pains, there’s no question.”