Who Does What ?
Plan Sponsor
Third Party Administrator / Record Keeper
Investment Advisor
• Oversees the plan and selects providers
• Legally must act in the best interest of the plan participants and their beneficiaries
• Follows the plan documents
• Selects, or hires someone qualified to select, the plan investments
• Pays only reasonable plan expenses
Investment Advisor
Third Party Administrator / Record Keeper
Investment Advisor
• Performs Due Diligence & Oversight
• Provides plan-level investment advisory services
• Provides objective and unbiased investment advisory and investment services to plan participants
• Conduct annual fiduciary review
• 3(21) Investment advisers offer investment advice on limited fiduciary protection
• 3(38) Investment manager makes investment decisions and takes liability for them
Typical Fee Arrangement
• Flat fee charged to the Plan Sponsor (employer) on a quarterly basis
or
• Paid by the Record Keeper as a percentage of plan assets. Fee is charged across the board to each participant with an account balance
Third Party Administrator / Record Keeper
Third Party Administrator / Record Keeper
Third Party Administrator / Record Keeper
• Plan Design / Drafting legal plan documents
• Perform annual compliance testing (if required)
• Prepare and file annual Form 5500
- Service can be bundled or unbundled, depending on complexity of the plan
• Record Keeper provides monthly statement and website access
Typical Fee Arrangement
• TPA typically charges a one time, flat fee to establish the plan.
• On an ongoing basis, TPA typically charges an annual baseline fee, plus a per participant fee, and ancillary fees for ad hoc services.
• Record Keeper will charge a separate fee for providing asset custodial services, typically as a percentage of the amount in each participants account, charged to each participant.