Technically, it is the plan sponsor (or employer) who has the responsibility for the actual day-to-day administrative functions of the 403(b) plan, or for choosing the plan administrator, called a TPA (third party administrator).
Even with a TPA, the employer will always be the one that can be audited by the IRS; the legal responsibility for any administrative function still lies with the plan sponsor. Where there is a TPA, the employer is responsible to make sure that the proper data is transmitted to the TPA for the accurate administration of the plan.
Other employer responsibilities are:
- payroll;
- communicating data on all participants (name, address, date of birth, hire and rehire dates, date of termination of employment); and
- any other information that the TPA needs to properly handle the administration of the plan.
Editor’s Note: This is an occasional feature in the NTSA Advisor. This tip is taken from the 403(b) Plan Sponsor Guide, which is being made available to school districts nationally to assist them in understanding how to improve 403(b) plan participation and savings rates to help employees achieve a comfortable and timely retirement.
The 403(b) Plan Sponsor Guide is part of the content contained in the NTSA Certified Retirement Education Specialist (CRES) materials. The NTSA Certified Retirement Education Specialist (CRES) program and designation has been developed in order to equip advisors to be qualified and available to teach the NTSA educational program, which is designed to provide teachers with the basics of planning for retirement and improve their retirement readiness. More information about CRES is available here.
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