The Rosenbaum Law Firm P.C. Blog

Anyone who works in the retirement plan industry has heard the complaint from advisors and plan sponsors alike: it’s getting harder to find a good TPA.

That shouldn’t surprise anyone. Being a third-party administrator today requires a combination of legal knowledge, technical expertise, and operational discipline that didn’t exist twenty years ago.

Administering a retirement plan used to be relatively straightforward. The rules were simpler, plan designs were more standardized, and compliance testing followed predictable patterns. Today, however, the regulatory environment has grown far more complex.

Consider just a few of the issues TPAs now handle routinely: SECURE 2.0 changes, safe harbor plan rules, coverage testing corrections, automatic enrollment compliance, Roth provisions, and the ever-present risk of operational errors. Each one of those areas can trigger IRS corrections, Department of Labor scrutiny, or participant complaints if handled improperly.

At the same time, industry consolidation has reduced the number of independent TPAs. Larger recordkeepers increasingly offer bundled services, and many smaller firms have been acquired or simply closed their doors as the regulatory burden grew.

The result is an industry where experienced administrators are in short supply.

It’s not unlike professional football. Every team wants a great quarterback, but there simply aren’t enough elite ones to go around. The same dynamic exists with TPAs. Everyone wants the experienced administrator who understands plan design, compliance testing, and operational risk.

But there are only so many of them.

For advisors and plan sponsors, the lesson is simple: when you find a good TPA, treat them like a franchise quarterback. Protect them, respect their expertise, and understand their value.

Because replacing them is far harder than you might think.

Whenever Congress creates a new savings vehicle, the legislation is only the beginning. The real work begins when the IRS and Treasury try to translate the statute into operational rules. That’s exactly what we’re seeing now with the proposed regulations for so-called “Trump Accounts.”

Trump Accounts were created under tax legislation enacted in 2025 and are designed as tax-advantaged investment accounts for children. The idea is simple: give families a way to start building long-term savings early in a child’s life. But like most things involving retirement and tax law, the details matter.

Under the program, the federal government plans to deposit a one-time $1,000 contribution into accounts for eligible children born between 2025 and 2028, provided a parent or guardian elects to participate.

Parents and others may also contribute up to $5,000 annually to the account. Employers may contribute up to $2,500 per year toward an employee’s child’s account as part of a contribution program, with overall limits applying to total annual contributions.

The accounts resemble individual retirement accounts in several respects. Funds generally must remain invested until the child reaches adulthood, and investments are limited to broad, low-cost index funds tracking U.S. equity markets. Eventually the account converts into a traditional IRA-type structure, with typical tax rules applying to distributions.

For the retirement plan community, the IRS proposal is an important step because it begins to answer operational questions. Who opens the account? How is the government contribution triggered? What responsibilities fall on parents, employers, and financial institutions?

Those questions matter because every new savings vehicle eventually creates administrative challenges.

Whether Trump Accounts become widely adopted remains to be seen. But one thing is clear: whenever the government creates a new tax-favored savings program, the financial services industry inevitably becomes part of making it work.

And as always, the devil is in the details.

If you want to understand where the Department of Labor is headed on retirement plan investigations, the agency recently provided a roadmap. The Employee Benefits Security Administration (EBSA) updated its national enforcement projects, which essentially signal where investigators will focus their attention in the coming years.

For plan sponsors, this announcement is worth paying attention to—not because it creates new rules, but because it highlights the areas where regulators believe the biggest risks currently exist.

One of the most notable additions to the enforcement list is cybersecurity. Retirement plans hold sensitive participant data and billions of dollars in assets, making them attractive targets for cybercriminals. EBSA investigators will review whether plans and service providers follow best practices to protect systems and data from cyber threats.

Another major focus will be retirement asset management. The DOL intends to closely examine whether fiduciaries are prudently selecting and monitoring investment options, as well as evaluating plan fees. Even in participant-directed plans relying on ERISA’s Section 404(c) safe harbor, fiduciaries remain responsible for choosing and monitoring the investment lineup.

The agency will also continue prioritizing protecting participant benefit distributions, particularly when plans are abandoned or sponsors fail to properly distribute benefits owed to former employees.

Interestingly, the DOL has reduced its focus on missing participants and removed ESOPs from the national enforcement list, signaling a shift in investigative priorities.

For plan sponsors, the takeaway is straightforward: enforcement priorities change, but fiduciary responsibilities remain the same. Sponsors should regularly review cybersecurity protections, investment monitoring processes, and procedures for locating participants and paying benefits.

In other words, the DOL has essentially told the retirement plan community where it plans to look next. Plan sponsors would be wise to make sure everything is in order before investigators come knocking.

In the world of retirement plans, it’s easy to overlook the fine print — until someone sues you over it. The IRS just reminded us why distribution notices matter with the release of Notice 2026-13, which updates the safe harbor 402(f) model explanations for eligible rollover distributions.

Let’s cut to the fiduciary core: Section 402(f) requires that a written explanation be furnished to any participant or beneficiary eligible for a rollover distribution — and it must be provided within a reasonable period of time before the distribution is paid. For years, plan administrators have relied on prior IRS model language to satisfy this requirement. Now the IRS has updated those safe harbor explanations to reflect SECURE 2.0 changes and other tax law developments.

Here’s what changed, and why you should care.

First, there are now separate model notices for non-Roth accounts and designated Roth accounts. That matters because the tax consequences are different, and sloppy drafting here creates confusion at best and exposure at worst.

Second, the updated language incorporates the expanded exceptions to the 10% early withdrawal penalty, including newer SECURE 2.0 distribution categories. If your notice doesn’t reflect those changes, you’re giving participants incomplete information.

Third, the models reflect changes to required minimum distribution rules, including updated RMD ages and special surviving spouse provisions.

This isn’t glamorous work. No one markets their firm based on beautifully drafted rollover notices. But outdated 402(f) language is a preventable compliance failure.

Sponsors and providers should review distribution packages now. Because when a participant challenges a payout, “we didn’t update the template” is not a defense.

Details matter. Especially the ones at the back of the packet.

In the world of retirement plans, it’s easy to overlook the fine print — until someone sues you over it. The IRS just reminded us why distribution notices matter with the release of Notice 2026-13, which updates the safe harbor 402(f) model explanations for eligible rollover distributions.

Let’s cut to the fiduciary core: Section 402(f) requires that a written explanation be furnished to any participant or beneficiary eligible for a rollover distribution — and it must be provided within a reasonable period of time before the distribution is paid. For years, plan administrators have relied on prior IRS model language to satisfy this requirement. Now the IRS has updated those safe harbor explanations to reflect SECURE 2.0 changes and other tax law developments.

Here’s what changed, and why you should care.

First, there are now separate model notices for non-Roth accounts and designated Roth accounts. That matters because the tax consequences are different, and sloppy drafting here creates confusion at best and exposure at worst.

Second, the updated language incorporates the expanded exceptions to the 10% early withdrawal penalty, including newer SECURE 2.0 distribution categories. If your notice doesn’t reflect those changes, you’re giving participants incomplete information.

Third, the models reflect changes to required minimum distribution rules, including updated RMD ages and special surviving spouse provisions.

This isn’t glamorous work. No one markets their firm based on beautifully drafted rollover notices. But outdated 402(f) language is a preventable compliance failure.

Sponsors and providers should review distribution packages now. Because when a participant challenges a payout, “we didn’t update the template” is not a defense.

Details matter. Especially the ones at the back of the packet.

Fee compression isn’t coming. It’s here.

Every provider I speak to says the same thing: “We’re losing deals on price.” But here’s the uncomfortable question — are you losing on price, or are you losing on clarity?

If a prospect can’t clearly articulate what makes you different, you’ve already become a commodity. And commodities compete on price.

Sponsors and advisors don’t wake up thinking about your workflow efficiency, your testing accuracy rate, or your turnaround times. They think about risk, outcomes, and whether you make them look smart.

If you don’t define your value — technical expertise, responsiveness, niche focus, litigation awareness, SECURE 2.0 mastery — someone else will reduce you to a line item in a spreadsheet.

“Provider A: $X per head.” “Provider B: $X minus 10%.”

That’s not a strategy. That’s erosion.

The firms that are winning right now are precise about who they are. They specialize. They write. They speak. They educate. They explain complex issues in plain English. They become trusted experts rather than interchangeable vendors.

Price pressure is inevitable in a maturing industry. But margin compression is optional if you position yourself correctly.

If your differentiator is “great service,” you don’t have a differentiator. That’s the baseline.

Define your value before someone else discounts it.

Plan sponsors are busy people. Running a business involves managing employees, customers, vendors, and finances. In the middle of all that, a 401(k) plan can feel like just one more administrative burden competing for attention.

The problem is that ERISA does not make allowances for busy schedules. Deadlines still apply whether the company is growing rapidly or struggling to keep up. Late employee deferral deposits, missed notices, and incomplete census data are common problems that arise when retirement plan responsibilities are pushed aside.

Many sponsors assume that service providers will catch problems before they become serious. Sometimes they do, but often they can’t. Providers depend on timely and accurate information from the employer. When that information is delayed, the plan can fall out of compliance quickly.

Late deposits are one of the most common examples. Sponsors often intend to make deposits promptly but allow payroll timing or cash flow concerns to interfere. The Department of Labor treats late deposits as prohibited transactions, regardless of intent.

Annual notices and Form 5500 filings create similar risks. Missing a deadline rarely feels urgent at the time, but small oversights can lead to penalties and correction costs later.

Running a business is demanding, but a retirement plan requires consistent attention. ERISA does not recognize good intentions or busy schedules as excuses.

The sponsors who avoid problems are the ones who treat their 401(k) plan like an ongoing responsibility instead of an occasional task.

We’ve all seen it. The branded tablecloth. The stress balls. The bowl of candy. The hopeful smiles.

And then… nothing.

Conferences don’t generate revenue. Relationships do.

Too many providers treat conferences like fishing expeditions. Set up the booth, wait for traffic, collect business cards, send one follow-up email, and move on. That’s not business development. That’s wishful thinking.

Real conference ROI starts before the event. Who’s attending? Which advisors or sponsors do you want to meet? Did you schedule conversations in advance? Are you speaking on a panel? Are you publishing content tied to the event theme?

And it continues after the conference. Structured follow-up. Personalized outreach. Thoughtful articles referencing conversations you had. Consistent visibility.

The booth is a prop. The real value is credibility and positioning.

If you show up as “another provider,” you’ll be treated like one. If you show up as someone who understands SECURE 2.0 chaos, Roth catch-up confusion, pooled plan strategy, or testing nuances — you become memorable.

Networking without strategy is expensive socializing.

The firms that grow don’t rely on foot traffic. They use conferences as amplifiers for an already clear message.

The booth doesn’t close the deal.

You do.

I can’t tell you how many times I hear this from plan sponsors: “The plan is fine. No one’s complaining.”

Silence is not a fiduciary audit.

Participants rarely complain about fees they don’t understand, investment lineups they didn’t choose, or administrative errors they can’t see. A quiet plan is often just a disengaged plan. And disengagement is not a compliance strategy.

When was the last time your committee benchmarked recordkeeping fees? Not glanced at a report — actually benchmarked them. When did you last review your investment policy statement and compare it to what’s actually in the lineup? Do your target-date funds reflect your workforce demographics, or are they there because they were “good enough” ten years ago?

Fiduciary responsibility under ERISA isn’t about reacting to problems. It’s about process. Documented, consistent, thoughtful process.

Markets fluctuate. That’s normal. But stale governance is avoidable. If your committee meets once a year to rubber-stamp reports, that’s not oversight — that’s ceremonial.

I’ve seen plans that were “fine” for years until a DOL investigator asked for meeting minutes, fee benchmarking reports, and service agreements. Suddenly “fine” turned into “we meant to get to that.”

The absence of complaints is not evidence of prudence. It’s often evidence that no one is looking closely.

If you’re a plan sponsor, assume your plan is not fine until you can prove it is — with documentation, benchmarking, and regular review.

Quiet plans don’t stay quiet forever.

Recurring 410(b) failures are rarely random.

When a plan consistently struggles with coverage testing, it’s not bad luck. It’s structural.

Maybe the ownership group is highly compensated and aging while rank-and-file turnover is high. Maybe eligibility rules were designed for a workforce that no longer exists. Maybe compensation definitions create unintended exclusions.

The coverage test isn’t just a compliance hurdle. It’s diagnostic.

Too many providers treat testing failures as technical puzzles to be solved at year-end — add a QNEC here, adjust a gateway there, lean on fail-safe language. Problem fixed. Until next year.

But if you’re fixing the same problem repeatedly, you’re not solving it. You’re patching it.

Coverage failures often signal deeper design misalignment between the business model and the retirement plan. A growing professional services firm needs a different structure than a seasonal employer. A closely held company with family ownership requires intentional design from day one.

The providers who stand out don’t just “run the test.” They interpret it. They go back to the sponsor and say, “Here’s what this is telling us about your workforce.”

That conversation elevates you from processor to advisor.

Testing is not just about passing. It’s about understanding.

If 410(b) keeps flashing red, it’s not the test that’s broken.