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.
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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

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“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.

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