ABP is pleased to be part of an elite group of retirement plan professionals that have undergone the rigorous process required to obtain and maintain a CEFEX Certification for Retirement Plan Service Providers.
This certification is an independent recognition of an Administrator’s conformity to all Practices and criteria within the ASPPA Standard of Practice. It implies that the firm can demonstrate adherence to the industry's best practices and is positioned to serve Plan Sponsors and other fiduciaries.
CEFEX, the Centre for Fiduciary Excellence, LLC, has been partnered with ASPPA (American Society of Pension Professionals and Actuaries) since 2007 to offer independent certifications in various areas of retirement plan servicing. The ASPPA Administration Services certification obtained by ABP is geared specifically toward firms that offer third party administration (TPA) and consulting services. The certification addresses areas from all aspects of a retirement planning firm, including specific retirement plan services rendered, personnel, information technology, and general business practices. We believe that this certification puts ABP in a uniquely qualified position to administer clients’ retirement programs.
Many of ABP’s clients don’t know that although retirement plans are governed by volumes of regulatory actions, the TPAs who service those plans are not subject to any regulated environment. TPAs can range from a person or two operating out of a basement (which is actually how ABP was formed in 1983) to multi-billion dollar companies that perform TPA functions in conjunction with a number of other related services. No licenses or professional credentials are required. No continuing education is required.
Plan sponsors have a fiduciary responsibility when they select service providers. By their own admission, many plan sponsors don’t have the background knowledge necessary to appropriately differentiate and choose between the numerous service provider options. The lack of any professional requirements for TPAs makes this choice even more difficult. An independent certification from CEFEX helps plan sponsors in satisfying this fiduciary responsibility when selecting ABP as their TPA. Past this initial selection process, clients and advisors can feel comfort in knowing that ABP is dedicated to continually improving practices and procedures; we intend to re-certify with CEFEX on an annual basis. We believe that a continued focus on best practices will allow ABP to provide the best possible service and products to all of our clients.
Need for Action
All plan fiduciaries are facing increasing pressure to both meet new regulatory requirements and demonstrate fiduciary excellence in their plans. TPAs provide critical services to the plan fiduciaries in these areas.
To help deal with this increasing pressure, retirement plan sponsors, investment advisors and recordkeepers should and will demand more expertise from providers. They should expect their TPA partners to respond with excellent operational and management practices. They should expect their TPA partners to document their procedures to effectively perform administration and valuation functions and reduce the risk of errors in an increasingly complex environment.
The CEFEX certification process was created as an independent tool to help TPAs implement administrative best practices and to document this enhanced level of service and competence.
The CEFEX certification of a TPA is based on the Standard of Practice for Retirement Plan Service Providers, published by CEFEX and ASPPA. The ASPPA Standard applicable to TPAs is comprised of four elements:
Organizational business structure review to develop and maintain an effective company
Effective management structure and succession planning
Documented business planning
Risk assessment of all aspects affecting the continued success of the firm
Valuable human resource procedures
Demonstration of adequate resources and financials to support operations
Formalized processes and controls
Assessment of business partner selection and monitoring practices
Documentation of all processes to support the service agreement with plan sponsors
Transparent reporting of fees and revenue received from plan assets and plan sponsors
Marketing and sales practices
Documentation of all transactional processes
Quality control process and reporting for accuracy and timeliness reviews
IT plans for data security
Disaster recovery plans and testing
Monitor the procedures that are put into place to demonstrate continuous evaluation
Scheduled reviews of all processes, procedures and documentation for continued effectiveness
Demonstration of impartiality and objectivity with regard to reviews
Certification by CEFEX is achieved on the basis of a formal annual assessment which is performed by an independent CEFEX Analyst who has a minimum of a Qualified 401k Plan Administrator (QKA) designation. The work is then reviewed by the CEFEX Registration Committee of fiduciary experts, with at least one member having the Certified Pension Consultant (CPC) designation.