While I know my discussions about payroll provider third-party administration firms (TPAs) have hit nerves (especially those that work for those firms). We can all debate whether there is a link between running payroll and running 401(k) plans or whether there is an inherent conflict of interest for a TPA that has its investment advisory practice. The main important thing is that whatever TPA a plan sponsor selects, it should choose a TPA that is competent in its services and charges a reasonable fee for the services they provide. It’s that simple.
So while I have been honest in my views about payroll provider TPAs, my only issue has been the way they operate in administering plans. So I don’t care whether the TPA is in the payroll business or the meat packing business, the most important thing is competent administration at a fee that plan sponsors can understand, that’s it.
