Understanding the Role of the TPA in Retirement Plan Design
When a business owner decides to offer a retirement plan, it’s a meaningful investment in the future, both for their team and for their own financial well-being. But with that decision comes a new set of responsibilities, deadlines, and regulatory requirements. That’s where a Third Party Administrator (TPA) like Mirador comes in.
What Is a TPA and Why Does It Matter?
A TPA, or Third Party Administrator, plays a critical role in the design, implementation, and ongoing management of retirement plans like 401(k)s. We’re the ones making sure the plan works, for your business, your people, and the IRS.
While the financial advisor focuses on investment options and the recordkeeper handles transactions, the TPA is responsible for how the plan is built and whether it complies with Department of Labor and IRS rules.
In the words of one Mirador expert featured in the video on this page:
“401(k) plans have to abide by a lot of IRS rules and regulations as well as DOL. And so there is a lot of compliance that comes into play. You have to file a Form 5500, you have to do nondiscrimination testing… you as a plan sponsor are responsible. Many plan sponsors, because it’s a lot of work, hire outside help, such as a 401(k) administrator or a third party administrator, where we are assisting you in making sure that you are in compliance with all of the regulations.”
The Business Owner’s Role: Plan Sponsor
When you offer a retirement plan, you’re not just doing something good for your team, you’re taking on the role of “plan sponsor.” That comes with fiduciary responsibility. You’re responsible for making sure the plan is fair, compliant, and properly managed.
This includes:
- Offering a plan that doesn’t discriminate in favor of highly compensated employees
- Filing required forms like the 5500
- Ensuring deadlines are met for contributions, notices, and testing
- Keeping the plan document up to date
But most business owners aren’t tax code experts. Nor should they be. That’s why TPAs exist.
What a TPA Does
At Mirador, we act as your technical expert and strategic partner in plan design. Here’s what that includes:
1. Plan Design
We don’t sell products, we build plans. That means we customize your 401(k) or defined benefit plan based on your goals: saving more for ownership, rewarding key employees, or staying ACA compliant. We ensure your plan structure maximizes flexibility and tax advantages.
2. Ongoing Compliance
We handle:
- Annual nondiscrimination testing
- Coverage and top-heavy testing
- Form 5500 preparation
- Required plan notices (Safe Harbor, QDIA, etc.)
- Contribution limit calculations
We stay on top of IRS and DOL updates so you don’t have to.
3. Consultation and Adjustments
Life changes, and so do businesses. We help you adjust your plan as your headcount, structure, or goals evolve.
Why “Third Party”?
The term “Third Party Administrator” simply reflects the relationship: the business owner (first party) hires an outside expert (third party) to fulfill the responsibilities of plan design and administration. It’s still your plan. You’re still responsible. But with a qualified TPA like Mirador, you’re not doing it alone.
When It Matters Most
Compliance issues often surface long after a plan is in place, during an IRS audit, a failed test, or a missed deadline. That’s why having a proactive TPA is so important. We don’t just check boxes. We anticipate issues, design around your goals, and guide you through the full lifecycle of your plan.Bottom line: You’re responsible for the plan, but you don’t have to manage it alone. At Mirador, we make sure your retirement plan works as hard as you do.
