Why Plan Sponsors Should Avoid Using Their Payroll Provider as Their 401(k) TPA


It’s just natural that certain businesses will add different product lines as a national outgrowth of their business and to create a synergy. Old Spice used to be just an old Proctor & Gamble aftershave (with those nautical whistling commercials) that added deodorants and body wash to their product line and has become one of the most popular lines of male grooming products. PepsiCo added a snack company called Frito-Lay and who could forget that Amazon.com started out as just an online bookstore? However, there are times when adding different product lines or industries or brand extensions to an existing business isn’t a good idea because it either offers no synergy or because the business making the addition is ill equipped to handle it. Ben-Gay Aspirin, Smith and Wesson mountain bikes, and Lifesavers Soda are some business and brand extensions that might have looked good on paper, but fizzled out. This article is to let you know that hiring your payroll provider as your third party administrator (TPA) is not the best idea and something you should consider avoiding.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Ary Rosenbaum, The Rosenbaum Law Firm P.C. | Attorney Advertising

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