Most administration conducted by third-party administrators (TPAs) is quite good, but the juicy and scary stories are about the terrible TPAs and the havoc they create.
What is amazing are not the errors in the definition of compensation or a screwed-up compliance test, what is amazing are the catastrophic errors. I’m talking about the 5500s that weren’t filed or the missing restatements that weren’t made. I just talked to a potential client over 15 years of documents and Form 5500s that were not done. While I can scratch my head about how a TPA can get this so wrong, I also think about the plan sponsor that was taken for a ride and just didn’t realize their fiduciary duty to get these things done.
