Owning a 401(k) is one of the best ways to save for retirement and Las Vegas 401(k) providers can help you get the best plan possible. A 401(k) plan can help you and your employees grow your nest egg for your golden years and have the retirement of your dreams!

Many U.S. workers don’t have to worry too much about setting up a 401(k) since their employers take care of it behind the scenes. But if you are “the employer responsible” for having to establish, maintain, and monitor a plan, do you know how to make the 401(k) the best it can be?

Don’t worry, you’re not alone in the process! Retirement planning is akin to a team sport. In order to have a winning team, you need top-notch professionals in all positions.

Your 401(k) team will be made up of the following players:

  • A Plan Recordkeeper
  • A Third Party Administrator
  • A Plan Custodian
  • A Plan Advisor

The Plan Recordkeeper

The plan recordkeeper records the amount and exact type of employee contributions that are made to the plan. It also tracks the destinations of each dollar, whether incoming or outgoing.

This is important because not all contributions are treated the same. Contributions are affected differently by tax rules and other factors such as the plan’s vesting schedule. Also, the recordkeeper must be able to distinguish your assets from those of all of the other participants in the plan which may be pooled together under one “roof.”

Recordkeeper duties include:

  • Keeping track of different contribution types
    • Rollovers, employee salary deferrals, non-qualified contributions
    • Employer matches
    • Employee assets and vested status
  • Maintaining individual account records
  • Mailing statements
  • Maintaining a digital portal for plan participants to view assets

Well-known recordkeepers include Vanguard, Fidelity, Voya, Empower, and Ascensus.

The Third Party Administrator (TPA)

The TPA is the team member that takes care of the necessary daily and yearly tasks that are more administrative in nature. A solid TPA will make sure that your 401(k) plan satisfies all of the regulatory and legal standards in order to maintain your plan in good standing and qualified status with the government.

Important TPA responsibilities include:

  • Keeping up with legal changes affecting your plan
  • Ensuring that your plan passes all compliance testing requirements
  • Preparing required notices for plan participants
  • Preparing regulatory forms such as the Summary Annual Report and form 5500
  • Calculating vested percentages
  • Allocating employer contributions

What Is The Benefit Of A TPA?

The benefits of hiring a TPA are found in the services they provide and which ultimately keep your legal responsibilities to a minimum, such as passing confusing and sometimes complicated compliance testing. Failing the required plan compliance testing can be costly! It can lead you to be liable for penalties, fees, and having to pay employee contributions. It also puts your plan at risk!

Failing compliance testing can also lead to employees receiving refunds on their salary deferrals, increasing their taxable income. A low fee but high-quality TPA is essential in order for your 401(k) to operate legally and save you time, stress, and money.

What Is The Difference Between A TPA And The Plan Recordkeeper?

The main difference is that the TPA keeps your plan qualified by ensuring that the legal standards are met. The recordkeeper keeps tabs on the actual dollar contributions and types within the plan and how that money is treated and taxed.

Bundled versus Unbundled Services

In an unbundled arrangement, the 401(k) plan consists of truly separate providers of TPA and recordkeeper services, among others. A bundled arrangement is one in which the plan services are all offered by the same vendor and is the more common practice.

One advantage of choosing the unbundled arrangement is that it provides for more flexibility and the ability to hire the best and most appealing vendors for each individual service. If the plan sponsor is at any time unsatisfied with the performance of one of the hired vendors, the sponsor can simply hire another service provider that is deemed to provide better or more cost-effective services.

A common concern of using unbundled services is the presumed increase in cost since each team member will charge their own fees. In reality, the costs are the same or very similar in both a bundled and an unbundled service plan. The main difference, however, is how the fees are charged.

In a bundled arrangement, fees are charged against the assets being held in the plan as opposed to directly charging the employer. In an unbundled arrangement, the employer can decide if fees will be paid from assets or directly by plan participants, arguably making the unbundled plan more advantageous for employers.

Las Vegas TPAs

In Las Vegas, there are a few options for using a TPA:

Both Jay and Rich are true local Las Vegas TPA providers while Pentegra is a national institution with Las Vegas offices.

The Plan Custodian

The plan custodian is the team member that functions similar to a bank while having a fiduciary responsibility for the plan’s invested assets. In a bank, you store your money in your chosen bank account but you retain the discretion of what to do with your money. The bank doesn’t set your budget or tell you how or where to spend your money.

The same is true with the plan custodian; they hold your assets but don’t exercise any authority over how to use those assets. The custodian simply holds the assets and documents 401(k) investment activities such as salary deferrals, withdrawals, and distributions to plan participants just like how your bank documents your income and expenses.

The Team Quarterback: The Plan Advisor

With so many moving parts you need someone to orchestrate your team in the most beneficial way for both your business and 401(k) success. Your team quarterback is the plan advisor, which integrates the services of the TPA, record-keeper, plan custodian, and all other services.

The best 401(k) plan advisors not only educate your employees and provide excellent fiduciary support to you, but they also strive to keep your recordkeeper and TPA competing every 2-3 years for your plan business. This keeps your costs low and service level high!

We are talking about your employee’s and your money after all, which is why you need the best advisor to help you oversee the entire operation at all levels and to protect your assets as well as reach your financial goals!

The Best Quarterback Is CEFEX Certified

Just having any quarterback is not enough, you need one that has the stats of a winner and the qualities of a successful leader. You want the Heisman Trophy-winning, first-team All-American advocating on your behalf, right? You can get that with a plan advisor that is CEFEX certified.

A CEFEX Certified plan advisor helps you win by:

  • Helping you fulfill your fiduciary responsibilities that many plans struggle with today
  • Keeping you out of trouble with the IRS and the Department of Labor
  • Educating your employees so that they can retire with a bigger nest egg and more confidence than they had ever dreamed possible
  • Optimizing investments, fees, and services

CEFEX, or the Centre For Fiduciary excellence, certification is how advisors demonstrate their professionalism and commitment to the best practice standards of the industry.  Plan advisors with CEFEX certification have passed rigorous evaluations and are best suited to helping you and your plan surpass all expectations.

CEFEX firms undergo yearly audits, performed by industry leaders and experts which are a measurable way of demonstrating continued competency and expertise.

Redrock Wealth is proud to be 1 of only 2 CEFEX certified advisory firms in Las Vegas (along with Arista Wealth Management). We prioritize your objectives and align our recommendations with your 401(k) plan goals. We put you first and adhere to strict fiduciary standards while continuously aiming to maximize success for our clients.

In Addition to CEFEX, Hire A 3(38) Investment Manager

3(38) vs 3(21) Investment Adviser

Las Vegas 401(k) advisors can be either a 3(38) full fiduciary or a 3(21) limited scope plan advisor.

The Employee Retirement Income Security Act of 1974 (ERISA) established practice standards that were designed to protect the retirement assets of employees. With this came the fiduciary responsibilities associated with providing and managing retirement benefits plans that you, as the employer, must adhere to.

In the government’s eye, the expectation is that all plan fiduciaries have the knowledge and expertise of a professional financial advisor. This may be difficult for many employers to achieve, especially if they lack formal financial education.

The question then becomes, how can you fulfill your fiduciary responsibility and stay out of trouble if you don’t possess the necessary knowledge? The short answer is that you need a 3(38) fiduciary investment manager.

With a 3(38) investment manager, you can offload the majority of your fiduciary responsibility to an expert with the proper education that will responsibly manage your plan’s investments and ultimately make decisions regarding your investments, rather than simply providing advice.

Compare that to a 3(21) investment advisor that can recommend an investment portfolio for your plan but has no discretionary authority over the plan. In this case, the employer maintains discretion, meaning that it is the employer’s job to select and monitor investment funds for the plan. If you make a mistake, you may be held liable for any losses that result. Don’t place that unnecessary stress on your shoulders.

As you can see, the only clear choice is to use a plan advisor that is also a 3(38) fiduciary because:

  • You will enjoy limited fiduciary liabilities (although you are still a fiduciary to the plan)
  • The investment portfolio will be selected by an expert who also assumes full responsibility for that selection
  • The plan’s funds will be monitored by the expert fiduciary who can make corrections as needed
  • You will be able to focus on your business not managing your 401(k) plan

Why Own A 401(k)?

A 401(k) offers you and your employees one of the best ways to save for retirement due to the many benefits that it offers, such as:

  • Tax benefits
    • Reduced annual tax bill
    • Deferred payment of taxes on dividends and capital gains
    • Deferred payment of taxes on contribution money until 401(k) withdrawals are made once in retirement, presumably while in a lower tax bracket
  • Most allow for automatic enrollment and contributions, thereby simplifying savings
  • Inflation-adjusted contribution limits
  • “Catch-up” contributions – Increased contribution limits for those over 50 years of age
  • A wide range of investment options
  • Additional company match, if available to employees
  • Asset protection from creditors

The Best 401(k) Plan

Although owning a 401(k) plan is one of the most useful ways for workers to save for retirement, not all 401(k) plans and providers are created or managed equally.

The best 401(k) will be provided to you by professional, experienced, and expert advisors, recordkeepers, third-party administrators, and plan custodians. These professionals should offer easy to access education, excellent customer service, reasonable & easy to understand fees, and user-friendly websites that provide a simple view of the available services and assets.

The best 401(k) will also include ample investment options with low-cost funds and will be monitored regularly by fiduciaries that always act for the benefit of the plan participants.

In 2018, CNBC reported that the number of 401(k) millionaires reached a new record of 168,000 people surpassing the milestone figure. You can build the nest egg of your dreams as well but you have to make the right choices now which include building the best team of expert professionals that can create a winning 401(k).

Build your best 401(k) today and make us your quarterback! We’d love to be on your team. Contact us now.


401k plan recordkeepers and TPA

Compliance testing


Fiduciary hierarchy

Bundled services

3(38) vs 3(21) fiduciaries

401k millionaires