Retirement plan administration and setup may sound like a lot of work – and it is. Fortunately, a plan provider can help set up the plan, maintain records, and file taxes. A plan provider is typically an insurance firm or mutual fund company, or a third-party administrator (TPA) that works with multiple mutual fund companies.

A provider can help you through these three critical stages of retirement plan administration:

1. Select a type of plan that will adequately provide for the retirement of your employees and address your company’s financial requirements
2. Establish the plan by choosing one with a detailed plan document, appropriate assets, investment tools for employees, and a viable recordkeeping system
3. Maintain and grow the plan by educating staff about the plan, making deposits on time, keeping up to date with government regulations, and managing plan assets.

Bundled vs. unbundled plan providers
Retirement plan administration usually involves two main categories of providers: bundled and unbundled.

Bundled plan providers provide a one-stop shopping source and are best for small companies because of their low cost and simplicity. They provide a single point of contact for all services – retirement plan administration, investment options, recordkeeping, and employee education. Most bundled providers are from insurance companies and financial institutions that have relationships with several mutual fund companies. However, they may not have a wide selection of investments to choose from, and customization is limited.

Larger companies seeking more control can opt for an unbundled plan provider. With an unbundled plan provider, you can choose a combination of in-house staff and providers to manage your company’s retirement plan administration. Unbundled plan providers also offer a wide variety of investment choices. Cost can be a deterrent – they are much more expensive than bundled plans. Because you have to manage multiple sources to make changes, they’re also more complex to administer.

Choosing between a bundled and unbundled provider comes down to cost and company needs. If you have more than 100 employees, it may help to compare both types. Companies with fewer than 100 employees typically opt for bundled providers because of their lower cost and simplicity.