PATA breaks down a pension into two parts:

• The plan document
• The plan’s annual administration

Plan Document:   
Every plan must have a plan document.  As a legal document governed by the IRS it must be kept in compliance with the IRS code that governs pension plans (Section 401). 

Within Section 401 of the code there are sub-sections that address specific design features, rules.  For example § 401(k) is where the IRS has written the rules that surround salary deferral contributions (pre-tax deferrals or after-tax ROTH deferrals).  § 401(a)(17) is where the IRS outlines how much compensation can be used when calculating contributions.  Over time these rules sometimes change.  The plan document is a legal document that must be kept in compliance, it must be updated to reflect those changes.  Keeping a plan document up to date and in compliance with the IRS code is an important part of having a plan.  A plan document that is not in compliance can be disqualified resulting in catastrophic financial consequences.  

The Plan’s Annual Administration:   
A plan must have an annual administration performed every year.  While the goal of a plan is to allow the plan participants to save towards their retirement, and for the sponsor of the plan to make a tax deductible employer contribution to the plan,  to do so your plan is required to follow the rules and pass many tests.  These tests ensure that you are running the plan in a non discriminatory way. Tests like the 410(b) coverage test, 415 annual additions, contribution deduction test, rate group test, top heavy test… just to name a few.  As part of PATA’s annual administration we will perform all the plan testing in addition to calculating any required contributions (safe harbor contributions or top heavy contributions) or even required distributions (RMDs).   PATA will reconcile the investments of each participant account and allocate the gains/losses appropriately.  Vesting will be determined and as required by law participant certificates will be created for  each plan participant.  Finally, the IRS form 5500 will be created and presented to the plan trustee/sponsor for their signature as well as a form authorizing PATA to file electronically the annual 5500 on the trustee’s/sponsor’s behalf

Summary:  
Having and running a qualified retirement plan requires some work.  It requires a Third Party Administrator (TPA) like PATA to ensure that the plan is kept in compliance and run according to the law.  If you have any specific questions then please do not hesitate to ask any questions at all.  We hope that this has been informative.