Understanding the Roles: Advisors vs. Recordkeepers vs. TPAs vs. Actuaries in Qualified Retirement Plans

When managing a qualified retirement plan—like a 401(k), 403(b), or defined benefit plan—it’s easy to get lost in the alphabet soup of service providers. Terms like financial advisor, recordkeeper, TPA, and actuary are often used, but each plays a distinct and vital role in the success and compliance of your retirement plan.

Here’s a clear breakdown of each role so you can confidently manage your plan and ensure it meets the needs of your business and your employees.

1. What Is a Retirement Plan Advisor?

A retirement plan advisor (also known as a plan fiduciary advisor or financial advisor) is your strategic partner in creating and maintaining a retirement plan that aligns with your company’s goals and fiduciary obligations.

Key Responsibilities:

• Helps select and monitor investment options.

• Provides education to plan participants.

• Offers fiduciary oversight (in some cases, as a 3(21) or 3(38) fiduciary).

• Benchmarks plan fees and performance.

• Coordinates with other vendors like recordkeepers and TPAs.

Value to Employers:

A great advisor ensures your plan is competitive, compliant, and cost-efficient. They reduce fiduciary liability and help employees prepare for retirement.

2. What Is a Recordkeeper?

A recordkeeper is the platform and service provider that tracks participant balances, investments, contributions, loans, and distributions. Think of them as the technology backbone of your retirement plan.

Key Responsibilities:

• Tracks individual participant accounts.

• Provides a participant portal and call center.

• Sends account statements and required notices.

• Processes contributions, distributions, and loans.

• Supplies daily valuation of investments.

Common Recordkeepers:

Fidelity, Empower, Principal, John Hancock, and Vanguard are a few well-known recordkeepers.

Value to Employers:

They ensure participants have accurate access to their retirement data and keep the administrative side of the plan running smoothly.

3. What Is a Third-Party Administrator (TPA)?

A TPA handles the compliance and administrative functions behind the scenes to keep your plan in good standing with the IRS and Department of Labor.

Key Responsibilities:

• Prepares annual Form 5500 filings.

• Conducts annual compliance testing (e.g., nondiscrimination, top-heavy testing).

• Drafts and updates plan documents.

• Manages eligibility tracking, vesting, and distribution approvals.

Independent vs. Bundled TPAs:

• Independent TPAs offer custom service and flexibility.

• Bundled TPAs are part of a full-service package with your recordkeeper.

Value to Employers:

The TPA is your compliance gatekeeper—helping you avoid costly penalties and keeping the plan running within legal guidelines.

4. What Is an Actuary in Retirement Plans?

Actuaries are typically involved in defined benefit plans (like pensions) or cash balance plans, where liabilities are more complex and mathematically driven.

Key Responsibilities:

• Calculates annual required contributions.

• Certifies funding status.

• Provides projections of future plan liabilities.

• Signs off on Schedule SB for defined benefit plan filings.

Value to Employers:

Actuaries ensure your pension or cash balance plan is properly funded and legally compliant—and help you manage long-term financial risk.

Quick Comparison Table

Final Thoughts

To run a successful retirement plan, you’ll need the right team. While their roles may overlap at times, advisors, recordkeepers, TPAs, and actuaries each bring unique expertise to the table. Understanding who does what helps you stay compliant, fulfill fiduciary duties, and support your employees’ retirement goals.

Looking to simplify your retirement plan oversight? Partnering with an experienced retirement plan advisor can help you coordinate these service providers, reduce administrative burdens, and improve outcomes.