Funding a small business with a Rollover as Business Startup (ROBS) allows you to put your hard-earned retirement dollars to work. But you shouldn’t do it alone! Instead, choose an experienced third-party administrator (TPA) to install and oversee your plan.
Because ROBS plans are subject to strict rules from the IRS, your plan must be kept in compliance. You want to trust that the ROBS provider you choose will ensure your plan’s success so you can focus on building your business. Before you move forward with ROBS, ask your potential TPA these four questions.
How much experience do you have?
If your ROBS plan falls out of compliance, you could owe thousands of dollars in penalties and taxes. This is why choosing an experienced provider is crucial. Your TPA should have a deep understanding of the legislation that makes ROBS possible and ample experience to back it up. Ask the provider how long they’ve been in the business as well as how many rollovers they install and administer each year.
It’s best if your TPA specializes in ROBS structuring. This way, you know that ROBS is a core piece of their business—not something they do infrequently on the side.
Did you know…Tenet Financial Group was funded in 2008 using a ROBS? This means we really “practice what we preach!”
Will you support me through an audit?
If the IRS suspects non-compliance, they might send an inquiry letter and/or conduct an audit of your plan. This can be a difficult process to endure alone. Your TPA should maintain your plan’s records and be able to help you answer the IRS’s questions to prove compliance. If a TPA won’t assist you through an inquiry or audit, they aren’t providing the support you deserve.
You should also inquire whether the TPA has had any audits done on their plans. This will illuminate how successful their plan track record has been over the years.
Did you know…Tenet Financial Group has never had a client audited by the IRS?
How much do you charge and what’s included?
Plan installation and administration isn’t free. Most TPAs charge around a similar amount, but it’s important to understand the specific costs and what’s included in them. If they charge an ongoing administration fee, ask the TPA what services they’ll provide with that. If services like routine compliance testing or tax filing assistance are not included, inquire whether those come at an additional cost. You don’t want to be surprised with a larger bill later on!
Did you know…Tenet Financial Group provides all plan design, installation, and maintenance in-house?
How fast can you get me funding?
ROBS structuring does not happen overnight. Even still, it should be a relatively fast process, with most plans providing funding in around four weeks. Ask the TPA about their funding timeline, including the review, approval and installation processes. If the TPA has a pre-approved ROBS plan structure, this might make the Department of Labor and IRS approval process faster.
Did you know…Tenet Financial Group has what’s called volume submitter approval through the IRS?
What can Tenet Financial Group do for your business?
Tenet Financial Group is a leading provider of ROBS installation and plan administration services. With a pre-approved plan structure and years of experience funding businesses with ROBS, our team can be trusted with your self-directed 401(k). Contact us today to learn more about ROBS and whether we’re the right choice for your business!