Plan sponsors love the idea of simplicity. One provider, one platform, one point of contact. The recordkeeper says they can \u201chandle the TPA work,\u201d and suddenly it feels like you\u2019ve eliminated a layer. Cleaner, cheaper, easier. Until it isn\u2019t.<\/p>\n
The problem is that recordkeepers aren\u2019t built to be TPAs, they\u2019re built to process. They take data in, push data out, and rely on how the system is configured. That works great when everything is standard. It falls apart when your plan isn\u2019t. Eligibility nuances, compensation definitions, allocation conditions, these aren\u2019t just data points, they require interpretation. That\u2019s where a real TPA lives.<\/p>\n
What I see all the time is sponsors assuming the recordkeeper will catch issues. They won\u2019t. If the payroll feed is wrong, if eligibility is coded incorrectly, if a provision is misunderstood, the system will process it wrong every single time. There\u2019s no second set of eyes reviewing it because the same entity is running everything. Integration doesn\u2019t eliminate risk, it concentrates it.<\/p>\n
And here\u2019s the part that gets missed. When something goes wrong, the sponsor owns it. Not the recordkeeper. Not the bundled provider. The sponsor. That means corrective contributions, notices, and time spent fixing something that could have been caught early by independent review.<\/p>\n
There\u2019s nothing wrong with bundled services if you understand what you\u2019re getting. But thinking your recordkeeper is acting as a true TPA is where sponsors get into trouble. Processing is not the same as oversight. And in this business, oversight is everything.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" Plan sponsors love the idea of simplicity. One provider, one platform, one point of contact. The recordkeeper says they can \u201chandle the TPA work,\u201d and suddenly it feels like you\u2019ve eliminated a layer. Cleaner, cheaper, easier. Until it isn\u2019t. The … Continue reading