How retirement plan TPAs can enhance sponsor engagement

What’s driving the need for sponsor engagement

As retirement plans become more complex, you’re probably being called on to do more than provide administrative support. Increasingly, plan sponsors are looking for strategic partners who can help them navigate change, manage risk, and improve retirement outcomes. Two key trends driving this shift are:

• Evolving regulatory requirements—Legislation such as SECURE 2.0 comes with new compliance obligations, potential plan amendments, and operational considerations. As a TPA, you’re uniquely positioned to help sponsors understand their options, implement changes efficiently, and maintain plan compliance.
• Focus on longevity preparedness—As people live longer, plan sponsors are looking for ways to help participants improve their retirement readiness. You can take this opportunity to collaborate with plan sponsors, financial professionals, and other key stakeholders on plan design strategies and financial wellness initiatives that support better outcomes for longer lives.

How sponsor engagement can benefit TPAs

Strong client connections don’t just improve relationships—they can drive meaningful business results. Consider these key benefits of sponsor engagement:¹

• Helps boost client retention—Strong client relationships can improve retention, which can benefit your bottom line. Even a modest 5% increase in customer retention can boost profits by 25% to 95%.²
• Supports organic growth—Client-facing administrators who ask thoughtful questions, identify needs, and help solve challenges can uncover opportunities to deliver additional services and deepen relationships.
• Generates referrals—Satisfied plan sponsors and partners are more likely to recommend your firm to their peers, helping expand your network and create new business opportunities.
• Strengthens your competitive edge—Professionalism, responsiveness, and guidance can enhance your reputation, help build trust, deepen customer loyalty, and differentiate your business.

How TPAs value sponsor engagement

As TPAs take on a more strategic role, firms are increasingly recognizing and rewarding employees who can build relationships, provide guidance, and deliver value beyond day-to-day plan administration. The table below compares how much more employees with significant client-facing responsibilities earned compared to their peers in similar roles with limited client interaction.¹

How TPAs can strengthen sponsor engagement

If you’re looking to turn more of your employees into client-engaging professionals, consider following these four tips.¹ 

1 Start with communication fundamentals

Many administrators struggle not because they lack knowledge, but because they communicate at an expert level rather than a client level.

Your internal training should consider focusing on:

• Simplifying complex concepts
• Effective storytelling techniques
• Active listening skills
• Asking effective questions
• Managing difficult conversations

Administrators need to learn that clients rarely want technical details first. They want clarity, confidence, and practical solutions.

2 Introduce consultative engagement skills

Every client interaction is an opportunity to gather information and help address key challenges.

Administrators should be trained to:

• Identify client goals
• Uncover underlying concerns
• Recommend solutions
• Guide decision-making

You don’t have to turn administrators into salespeople—focus on how they can add more value with every client interaction.

3 Teach relationship management skills

Many organizations assume employees know how to manage relationships. In reality, it’s a professional discipline that requires training in areas such as:

• Building trust
• Managing expectations
• Following through on commitments
• Handling complaints
• Creating positive client experiences

Strong relationships are built through consistent behaviors rather than occasional interactions.

4 Develop emotional intelligence

Clients often remember how they felt during an interaction more than the technical advice they received. Administrators should be encouraged to:

• Read client concerns
• Demonstrate empathy
• Adapt communication styles
• Handle conflict constructively

Emotional intelligence is increasingly becoming a core competency for TPA firms.

The future role of a TPA

Tomorrow’s TPA professional will combine strong technical expertise with the ability to explain complex topics, offer guidance, and serve as a trusted partner. Communication and relationship-building skills are becoming just as important as operational knowledge. TPAs that invest in helping their employees develop these skills can strengthen customer loyalty, stand out in a competitive market, and create new growth opportunities.

FAQs

What does a third-party administrator do for a retirement plan?

A third-party administrator (TPA) handles the day-to-day administration of a retirement plan. Typical responsibilities include plan document support, compliance testing, eligibility and vesting calculations, contribution and distribution processing, and annual reporting, such as Form 5500 preparation and filing. TPAs help ensure the plan operates in accordance with IRS and Department of Labor rules, making it easier for plan sponsors to maintain a compliant and efficient plan.

How can TPAs provide more value to retirement plan sponsors?

TPAs can provide more value by going beyond basic compliance to offer consultative support. This includes interpreting new regulations, consulting on plan design enhancements, identifying cost and efficiency improvements, and helping sponsors understand participant behavior and outcomes. Proactive communication, education, and data-driven insights enable TPAs to position themselves as strategic partners, not just service providers.

Why is sponsor engagement important in retirement plan administration?

Sponsor engagement is important in retirement plan administration because sponsors face complex regulatory, fiduciary, and operational challenges. Regular, proactive communication from TPAs helps sponsors understand risks and identify opportunities for plan improvements. TPAs that respond quickly to issues, align solutions with sponsor goals, and support better participant outcomes can build stronger client relationships and deliver greater long-term value.

What skills are most important for today's retirement plan administrators?

Modern retirement plan administrators need a mix of technical, analytical, and interpersonal skills. Key capabilities include: deep knowledge of ERISA and IRS regulations; strong attention to detail for compliance testing and reporting; proficiency with data and recordkeeping systems; and the ability to interpret complex rules for non-experts. Equally important are communication, problem-solving, and client service skills, enabling administrators to explain changes clearly, collaborate with sponsors, financial professionals, recordkeepers, and other service providers, and support better plan outcomes.