Several school districts in Lancaster County, Pa., have reduced the role of their third-party administrator, Gatekeeper Administration and Consulting LLC, to providing only compliance services to their 403(b) programs as a result of delays in forwarding employee retirement contributions to the mutual fund vendors.
According to Christopher Johnston, business manager for the Penn Manor School District, problems with Flagstaff, Ariz.-based Gatekeeper surfaced this year after new IRS regulations required employers to be responsible for monitoring and approving the transactions, as well as approving investment funds for their employees. This requirement, according to Mr. Johnston, led to a flood of school systems hiring Gatekeeper and other third-party administrators, overwhelming their resources and causing delays in money transfers.
We still use Gatekeeper, but for compliance purposes only, said Mr. Johnston, who hired Gatekeeper in October 2008. Now it's a customer-service issue for us; it's tough to get ahold of them. Mr. Johnston is now sending his district's retirement funds, between $25,000 and $26,000 per payroll period, directly to the employee-directed mutual fund vendors exactly what he was doing prior to hiring Gatekeeper. Mr. Johnston added that Gatekeeper has not lost any employee funds.
The other school districts that have reduced Gatekeeper's role are the Conestoga Valley School District and East Lancaster County School District.
Gatekeeper President and CEO Tamara Middleton said in a news release the company regrets the problems that have occurred and sent a letter to its customers explaining the overwhelming influx of business. She also said the company has opened a new customer care center to help remedy communications delays that have been reported. John D'Antona Jr.