Benefits February 1, 2005

Survey: TPA's Offering Broad Service Menu

February 1, 2005 (PLANSPONSOR.com) - Even though most third -party administrators (TPAs) (72%) still concentrate on traditional document, compliance and administrative services, a new survey found that a growing number can now meet a variety of additional plan sponsor needs.
Reported by

A survey of nearly 400 TPAs by Brightwork Partners found that more than a quarter (26%) have their own in-house recordkeeping capability while 23% say they frequently supply their own fully-bundled solution to plan sponsor clients in which the TPA not only delivers recordkeeping and participant services but also organizes the investment offering using a fund trading platform

Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.

“We may have been underestimating the skill and sophistication of the TPA community,” Ronald Bush, principal of Brightwork Partners said in a news release. “Advisors and their plan sponsor clients don’t necessarily need a big national brand to come in and run their 401(k) plan when this level of skill and service is available through a local TPA.”

The survey also found that:

  • the average TPA firm administers approximately 175 401(k) plans
  • the average 401(k) plan administered by these TPAs has $2.1 million in assets
  • retirement TPAs install an average of just over 22 401(k) plans per year
  • among TPAs administering 250 plans or more, the number of installations nearly doubles, to 40 per year
  • start-up plans represent nearly half of all 401(k) plan installations
  • over 60% of TPA firms report having at least one full-time salesperson on staff

The study is available on a subscription basis from Brightwork Partners, a DC research and consulting firm. Contact Merl Baker or Bush at 203-487-2000, or mbaker@brightworkpartners.comor rbush@brightworkpartners.com.

«