PLANSPONSOR’s first annual Third-Party Administrator (TPA) Survey questionnaire was distributed to approximately 1,070 known TPAs that serve the qualified and/or nonqualified retirement plan markets. A total of 128 responses were received by the June survey deadline. The survey questionnaire was brief and was designed to gather high-level information pertaining to each TPA firm’s size, service and capabilities in order to provide a sense of the overall TPA market landscape. The information from the survey is self-reported; all statements related to product/service offerings available to plan sponsors were supplied by the TPAs themselves and subject to PLANSPONSOR’s internal quality assurance reviews where possible. Readers are strongly encouraged to follow up with TPAs directly for additional detail on the scope of services available.
Further data, including listings of individual TPA firms willing to publish their information, can be found in the “Research” section of plansponsor.com. To learn how to participate in our 2017 TPA Survey, please contact Brian O’Keefe at email@example.com.
The survey includes TPA firms from the very small to the very large: $600,000 in total retirement plan assets to $54 billion in plan assets, respectively; more than one in six have in excess of 500 plans. Survey participants have offices in all but seven U.S. states, and about one in six is a national firm. About 75% of survey participants are so-called “nonproducing TPAs,” meaning they sell no investment products. Survey respondents represent more than $849 billion, 175,000 plans and 12.5 million participants in all types employer-sponsored retirement plans.
While sponsors can choose from a broad range of recordkeepers, TPAs on average tend to work with a much smaller set of partners. For example, the 2016 PLANSPONSOR Recordkeeping Survey (see PLANSPONSOR, June) lists 60 recordkeepers, but TPAs say they typically work with only six to 10, depending on the situation. Seventy-two percent of TPA firms use their recordkeeper’s defined contribution (DC) platform for plan administration.
In terms of services most frequently offered by TPAs to plan participants, nearly all (90%) offer distribution assistance upon a participant’s separation from the employer, yet, at the other end of the spectrum, very few TPA firms (12%) offer financial counseling to participants. Services for plan sponsors and/or plan advisers, however, appear more robust. For instance, over 90% of TPAs provide 10 out of the 23 services listed here. On the other hand, less than one in five TPAs assists with investment selection or evaluation tools for target-date funds (TDFs).