A well-run 401(k) plan is a team effort. Each provider has a distinct role, and clear coordination helps the plan operate smoothly, supports informed decisions, and creates a better participant experience.

Whether you sponsor a plan for your company or participate in one, this guide explains who handles what, so you know where to turn. The Cassaday & Company, Inc. team prepared it to help sponsors and participants alike understand how these roles fit together.

Download the Guide: Who Does What in a 401k Plan?

At a Glance

How the Partners Work Together

The strongest service model is not three separate silos. It is a coordinated process with clear ownership, timely information sharing, and documented decisions.

The Three Core Service-Provider Roles

The exact division of responsibilities may vary by provider and contract. The descriptions below reflect common arrangements and should be read together with the plan document and service agreements.

Financial Advisor: Investment Guidance + Coordination

• Helps the plan sponsor establish and follow a prudent process for selecting and monitoring the plan’s investment menu, consistent with the advisor’s engagement and fiduciary status.
• Provides participant investment education and, when permitted by the engagement, individualized investment guidance or advice.
• Coordinates communication among the plan sponsor, TPA, recordkeeper, and other providers so questions reach the right party.
• Conducts periodic plan reviews that may address investments, participation, plan features, service, and fees.
• Helps the plan sponsor understand options and make informed decisions. The plan sponsor retains the responsibilities not expressly delegated.

TPA: Plan Rules + Compliance Support

• Helps design the plan around the employer’s goals and workforce needs.
• Prepares, maintains, and updates plan documents and amendments within the scope of its engagement.
• Performs required compliance testing, such as nondiscrimination testing and contribution-limit testing.
• May prepare or support required government filings and notices, depending on the service agreement.
• Provides technical guidance on plan administration and regulatory changes, and helps identify operational issues for correction.

Recordkeeper: Accounts + Transactions + Technology

• Maintains participant account records, balances, elections, and transaction history.
• Receives contribution data and allocates contributions to participant accounts based on instructions and investment elections.
• Processes plan transactions such as loans, withdrawals, distributions, rollovers, and investment changes, subject to plan rules and required approvals.
• Provides participant websites, statements, educational tools, and customer service.
• Produces plan and participant reporting and shares data with the plan sponsor and other providers.

An Important Point for Plan Sponsors

Hiring service providers does not automatically transfer every fiduciary responsibility. Plan sponsors should understand which responsibilities have been delegated, monitor providers and fees, review reports, address participant concerns, and document decisions. Fiduciary status depends on the functions performed and the applicable agreements.

Other Partners You May Encounter

• Payroll provider: supplies compensation, deferral, and eligibility data and helps transmit contribution information.
• Custodian or trustee: holds plan assets and executes transactions based on authorized instructions.
• ERISA counsel, auditor, or other specialist: may assist with legal questions, audits, corrections, or complex plan matters.

How Cassaday & Company Supports the Team

As the financial advisor, Cassaday & Company helps bring the pieces together. We work with the plan sponsor and the plan’s other providers to support investment oversight, participant education, periodic reviews, and clear communication. Our goal is to help plan sponsors make informed decisions and help participants use the plan with greater confidence.

Questions?

If you’re already a Cassaday & Company client, contact your advisor with any questions. If you’re not yet a client, contact us here.

Download the guide: Who Does What in a 401k Plan

For additional information

• U.S. Department of Labor: Meeting Your Fiduciary Responsibilities
• U.S. Department of Labor: Working With Retirement Service Providers

Important disclosure: This material is for general educational purposes only and is not intended as legal, tax, fiduciary, or investment advice. Provider responsibilities vary by plan design, service model, and contract. Plan sponsors should consult the plan document, service agreements, and appropriate professionals regarding their specific responsibilities. Investing involves risk, including possible loss of principal.

Securities offered through Osaic Wealth, Inc., member FINRA/SIPC. Investment advisory and insurance services offered through Cassaday & Company, Inc., a registered investment adviser not affiliated with Osaic Wealth, Inc.