Call me crazy, but I think less is more. If you have a 401(k) plan and another plan (usually a defined benefit or cash balance plan), there may be reasons why you would want multiple third-party administrators (TPAs). Speaking from experience, it’s difficult to place two plans with two different TPAs.
Often, there are communication issues and that is problematic because the two TPAs have to coordinate and work together. Recently, I’ve had to represent a plan sponsor because one TPA wouldn’t talk to the other and when there are potential compliance pitfalls, that puts the plan sponsor at risk for a business tax audit.
