A qualified retirement plan generally has the following roles:
Plan Participant
A plan participant is an employee who is eligible to participate in the retirement plan. Sometimes, even though the employee doesn’t have any balance in the retirement plan, he/she is still the plan participant.
Plan Sponsor
A plan sponsor is a company or employer that offers a retirement plan as a benefit to employees.
Plan Administrator
A plan administrator is a person or company responsible for managing a retirement plan on behalf of its participants and beneficiaries. In most cases, the plan sponsor is the plan administrator.
Record Keeper/Plan Custodian
In most cases, the record keeper and the plan custodian are the same. Recordkeepers track plan inflows and outflows, keep accounting records for plan participants, making distributions, taking contributions, and holding plan assets… Something like John Hancock, American Funds, VOYA, Empower, Fidelity, Vanguard, etc. are the most common record keepers that are familiar to you.
Third-Party Administrator (TPA)
The third-party administrator oversees plan transactions to ensure the retirement plan maintains compliance with ERISA, plan documents, and applicable tax laws. The recordkeeping and third-party administration functions may be provided by the same firm (referred to as a “bundled” plan), or the outside administration can be provided by a third-party administrator (referred to as an “unbundled” plan).
Financial Advisor
A financial advisor can provide independent investment advice to the plan. The right financial advisor can help you reach the long term retirement goal.
Enrolled Actuary
An Enrolled Actuary is any individual who has satisfied the standards and qualifications as set forth in the regulation of the Joint Board for the Enrollment of Actuaries and who has been approved by the Joint Board to perform the actuarial services required under the Employee Retirement Income Security Act of 1974 (ERISA). If your retirement plan is a defined benefit plan, it is required by law to retain an Enrolled Actuary to provide actuarial services.
ERISA Attorney
Health insurance, disability insurance, life insurance, retirement benefit…provided at work usually fall under the Employee Retirement Income Security Act of 1974, or “ERISA.” The attorney specialized in ERISA law is generally called an ERISA attorney.