Bundled Service Provider & a TPA

[Guest UKH]

If a provider is ready to hold on to the investments as well as do the administration work but are not ready to be trustees of the plan are they considered to be a bundled service provider or are they classified as a TPA.

I am trying to find out whether fiduciary responsibilities between Bundled Administration and TPA service differ?

I understand the type of service each one performs but what distinguishes a Bundled Service Provider from a TPA?

[Jon Chambers]

Bundled and TPA are just labels. Bundled simply means a combination of services. In this case, it sounds like a bundle, but not a complete bundle. Having a bundled provider doesn't mean you won't use other service providers, such as investment consultants or testing specialists. All larger plans have independent auditors. Perhaps the distinction is that bundled providers offer a relatively static set of services that encompass all or most operational elements, while non-bundled providers (which might include TPAs) offer a more flexible package that will require other providers to complete the service package.

Fiduciary rules are independent of the service provider. I'm somewhat of a contrarian, in that I believe using a bundled provider may expose the sponsor to greater fiduciary liability than an unbundled arrangement, because the investment choice (a primary fiduciary element) is intrinsically tied to the administrative service component. In any case, it's important to review and understand the service contract with any provider. In most cases, the sponsor retains effectively all fiduciary responsibility. Some trustee responsibilities can be outsourced, but beware the typical non-discretionary trustee agreement--the trustee typically accepts almost no responsibility.

Hope this helps,