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Leveraging Your TPA : How 401k Plan Sponsors Can Best Achieve it!

Leveraging Your TPA: How 401k Plan Sponsors Can Best Achieve It!

Mike Bourne, managing partner for Atéssa Benefits in San Diego, and incoming NIPA CFO, discusses how clients can best leverage their third party administrator (TPA) as well as those that don’t and the repercussions.

Clients that best leverage their TPA are engaged and communicate. The smart ones:

  • Communicate with their TPA
  • Actually execute on the advice given when they are instructed
  • Ask for advice before they make changes to their organization

On the other hand, those that don’t effectively leverage their TPA:

  • Don’t execute on advice given
  • Don’t communicate about changes in the organization

Hear from Mike about specific examples of how his clients are getting the most out of their relationship with their TPA. Because sometimes if you don’t ask, you won’t get.

Full Transcript Here

Fred Barstein with 401KTV here in Las Vegas at the National Conference for NIPA. I’m here with the incoming CFO, Mike Bourne. Welcome Mike.

Thank you, Fred.

Mike is Managing Director of Atessa Benefits, which is a San Diego based TPA, been doing that for about ten years, and before that a large plan sponsor himself running the retirement plan. So, Mike, okay if we ask you a few questions?


Thank you. So, one of these things we want to cover here is, getting from your perspective, and you’ve been on both side, so you have a great perspective. What three things that your best clients do, in terms of they leverage you the most? What are the three things that they’re really leveraging you for?

You know, these are very simple. They communicate, they actually do what we agree we’re going to do. They do it when we agree they’re going to do it. Then they seek out, they ask us for advice before they get themselves into something.

So, they’re engaging with you?

They’re engaging us.

What are the things they’re engaging and asking you about? What are the specific topics?

Well, a lot of times, what starts to happen is that they, they’re about to do something, form another entity. They’re about to buy another company, things along that line. We on our annual compliance questionnaire, always try to remind them, have you bought another company, have you set up a new entity or something along that line, because these small plan business owners are so entrepreneurial. The ones that tell us these things ahead of time, it allows us to make adjustments to the plan documents to also maximize the benefit when this transaction occurs.

It could also be they’re growing quickly, right?

They could be growing quickly. That could be a challenge too. You’ve gone from 80 employees to a 120 employees. That just triggered some things. In telling us that sooner than when we get the census a year later-

They can audit.

… or like an audit.

So let’s take the other side of it. So, when clients aren’t using you, what problems arise when they’re not communicating?

A lot of times, it’s just doing, not they didn’t execute on the things we asked them to do. You know, for instance forfeitures. There was a little bit of forfeitures there, apply that to some of the plan expenses.

Some money.

Some money is sitting in the account, it’s unallocated, but yet the plan document allows it to be used for plan expenses. So, it’s the easiest way to get it taken care of.

So, they could use it for education, what else?

They can use it to pay TPA fees, investment advisory fees.

So not settler fees, and the settler fees are really those that benefit the plan and not the participant.


So they can’t use the participant’s money to help them pay for if they hire an attorney to advise the committee for example.


So, none of that. So, any other examples of issues you’ve had to deal with where they didn’t use you as much?

Well, they started the communication, in this case, the plan sponsor said they were going to increase the owners comp. It was a five participant plan, two owners and they were going to increase their compensation. So, we made a couple design changes to the document, to allow this to be absorbed properly. Well, then they don’t do it. You know they started an exercise in November, we get the W2s in February and find out they didn’t increase their compensation.

And the repercussions were?

The repercussions are they actually couldn’t make contributions to their fine benefit plan, because they were over funded.

Right, that’s how, cool. Well, good. Well, thanks for your time, Mike, and thanks for support of 401KTV, and thanks for watching here from Las Vegas at the NIPA National Conference.


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