How to use an external TPA or advisor with your Betterment 401(k)

A retirement solution built around your plan’s needs

When it comes to running a 401(k) plan, there's no single playbook. Maybe you're setting up your first plan and want someone to handle the heavy lifting. Or maybe you've been at this for years, with a trusted financial advisor, a third-party administrator (TPA), and a plan design that works just the way you want it.

Either way, with Betterment at Work, you have options. We can provide recordkeeping, plan administration, and investment management under one roof or work alongside an external TPA and/or advisor.

For many employers, an all-in-one solution can make running a 401(k) plan simpler.

Betterment at Work offers:

• Recordkeeping services, including participant accounts, contributions, transactions, and reporting.
• Plan administration services, including agreed-upon compliance and operational responsibilities, such as preparing Form 5500, processing force-outs, and amending plan documents, as a 3(16) fiduciary partner.
• Investment management as an ERISA 3(38) fiduciary, including selecting, managing, monitoring, and benchmarking the plan's investment offerings. Plan sponsors can choose from Betterment's managed ETF portfolios or a suite of mutual funds (check them out here).

This integrated model may be a good fit if you want:

• One primary platform for your plan
• Fewer vendors to coordinate
• A streamlined experience for your HR or benefits team
• Digital tools for plan sponsors and participants
• Professional investment oversight
• Support with day-to-day plan administration

By combining these services, Betterment at Work can help reduce the operational burden on your team while giving employees a modern way to manage and understand their retirement savings.

An external TPA may be valuable when your plan has complex provisions, specialized compliance needs, or an established relationship with a provider you trust.

In this model, Betterment can serve as your recordkeeper and 3(38) investment manager while your external TPA handles specified administrative and compliance responsibilities. This approach can help you:

• Keep an existing TPA relationship
• Support more complex or highly customized plan structures
• Maintain additional retirement plans, like a cash balance or defined benefit plan

You do not have to choose between a modern recordkeeping experience and specialized administrative support.

Betterment also supports plans that want to work with an external retirement advisor.

Depending on the arrangement, an external advisor may:

• Provide investment recommendations as an ERISA 3(21) advisor, where they select an investment lineup that the plan sponsor approves.
• Serve as an ERISA 3(38) investment manager with full discretionary authority over the plan’s investment options.
• Choose to use Betterment’s managed ETF portfolios, where Betterment would retain its 3(38) role.

The right structure depends on your plan’s needs, your governance process, and the roles you want each provider to play.

Flexibility does not mean you have to manage everything yourself. It means you can choose how responsibilities are assigned and select providers based on your plan’s needs.

Even when fiduciary responsibilities are delegated, plan sponsors remain responsible for selecting and monitoring service providers and ensuring that plan fees are reasonable. The specific scope of each provider's responsibilities should be clearly defined in the applicable agreements and plan documents.

Your plan’s needs may change as your business grows. You may have a bundled solution and later decide to add an external TPA or advisor. Or you may have multiple providers and eventually decide that consolidating services would make the plan easier to manage.

Betterment at Work gives you the flexibility to adjust your plan’s provider structure without giving up the benefits of a modern recordkeeping platform.

Whether you want Betterment to do everything—from recordkeeping and administration to 3(38) investment management—or you want Betterment to work alongside an external TPA, an external advisor, or both, the goal is the same: to help you offer a retirement plan that works for your organization and your employees.

Betterment at Work gives you more ways to build the right 401(k) solution for your business.

Ready to get started? Get in touch.