Blog
June 8, 2018
Thank Goodness for a Good TPA
Have you ever used these words? If you have, you know the value that a good Third Party Administrator (TPA) brings to your practice.
I received a call from a friend and CPA a few months ago who shared about a medical practice that had five doctors and 20 employees. Each doctor had set up their own SEP IRA or 401(k) or Profit Sharing Plan many years ago. They had merged their individual practices into one group, but the employees were never included in any of the doctors’ plans and a plan was never established for the employees. No one had asked the question, “What should we do for our employees or do we need to do anything for our employees?”
The medical practice wanted to do things right, however they didn’t have a business professional giving them reliable advice. Finally, their CPA advised them to get a TPA involved and thank goodness they called me before the government got involved.
I explained the government’s rules require employers to cover their employees, if the owners have plans for themselves. They quickly figured out they had a liability and all that was at stake and proceeded to add a new 401(K)/ Profit Sharing Plan for their employees. Additionally, each doctor was able to keep their own plan in-tact and some were able to increase their savings.
It is not unusual for employers to overlook the myriad of governmental rules, if their advisors do not bring issues or the rules to their attention. Most 401k/profit sharing record-keepers do not view their jobs as being responsible to probe into how employers run their businesses. This means either running afoul of the rules or missing out on law changes that can benefit them.
If you haven’t reviewed the operational and design aspects of your retirement plan, you may be violating rules, missing out on increased contributions for yourself, or maximizing reductions in the overall cost to cover your employees.
Benefit Equity, Inc. is a premier local Third Party Administrator who has proudly participated in the Business Partnership program with the OCMA for the past six years. Contact us for a complimentary plan review today!
Michael Gorelick, Accredited Pension Representative (APR)
President
Benefit Equity, Inc.
mgorelick@benefitequity.com
(714) 480-1364 x220