Payroll Integrations Seeks to Tackle Form 5500 Hassles for TPAs

Payroll Integrations, a startup fresh off a $20 million funding round, has launched a platform for third-party administrators of retirement plans to speed the preparation and use of 401(k) reporting and compliance testing, the firm announced Thursday.

Payroll Integrations’ TPA Connect Platform is designed to automate the process of collecting payroll and census data for year-end compliance testing for Form 5500s or other needs during the year. Partnerships with payroll providers and recordkeepers including ADP, Quickbooks Online, Empower and Transamerica put the firm in a position to solve a longstanding problem for TPAs of tracking down participant data and sometimes going “line by line” over data, according to CEO Doug Sabella.

Doug Sabella

“This is a fragmented space in terms of data interconnectivity, and this solution allows us to bridge those gaps between entities who are not communicating with each other,” Sabella says.

San Diego-based Payroll Integrations, founded in 2016, connects payroll with employer-sponsored benefit plans, including retirement accounts and health savings accounts, for more than 5,000 companies. Its technology is designed to speed and simplify employee benefits, including onboarding, deferral changes and plan updates, a strategy backed by an investment round of $20 million in November 2023, led by Arthur Ventures.

The new solution for TPAs is “another arrow in our quiver” to address what Sabella and team tout as hours of labor to find and input participant and census data to check equal opportunity benefit compliance and the accuracy of distributions.

“TPAs are often having to go back and forth between the employers, payroll and recordkeeper,” Sabella says. “We’re bringing this historically labor-intensive process into the 21st century,” including software that includes single sign on and an app for users.

TPAs PPSS Inc. and Hunnex & Shoemaker are currently using the 401(k) compliance testing solution, and Sabella notes Payroll Integrations is in discussion with additional partners. TPA Connect is priced for customers on a subscription basis, depending on needs, according to Payroll Integrations.