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NIPA vs. ASPA


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#1 CCarter

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Posted 06 June 2002 - 11:41 AM

Hi -

I am fairly new to this field and am thinking about going the NIPA or ASPA route. What is more widely recognized and respected throughout the country NIPA or ASPA?

Thanks!

#2 Blinky the 3-eyed Fish

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Posted 06 June 2002 - 03:51 PM

My vote is ASPA.

#3 actuarysmith

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Posted 06 June 2002 - 06:11 PM

My opinion, for what it's worth is that ASPA is more widely recognized Nationally.

However, NIPA is rapidly becoming well recognized on the West Coast. In addition, I think that the NIPA exams and study materials are much more practical.

#4 Mike Kimball

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Posted 10 June 2002 - 01:29 PM

I have been on the ASPA PA-1 committee since March 2000. We not only write the manuals, but we also create the exam questions and decide the make-up of the 2 exams for each part. It is a challenging assignment to keep it at the beginning level.

Over the last 10-15 years or so, ASPA has created several new programs/courses geared to the defined contribution industry. This started with the Certified Pension Consultant designation in the early 1980s. The Qualified Pension Administrator was then added, followed by the Qualified 401(k) Administrator. As of 2002, ASPA offers 5 designations that number approximately 3,600+ (CPCs [706], QPAs [1,808] and QKAs [1,127]), along with 688 MSPA and 56 FSPA. The latter 2 are actuarial designations. The newsletter is now called “The ASPA Journal” instead of “The Pension Actuary”. ASPA had approximately 3,357 members in 1998 and has over 4,583 currently.

NIPA was the outgrowth in 1983 of several pension administration firms’ study groups (primarily in California) and currently has 700+ members. They have expanded beyond California to establish local chapters in Arizona, Idaho, New York City, Connecticut, Massachusetts, Iowa and Washington. NIPA’s membership is composed of individual memberships, TPA firms, insurance companies, and other financial service firms. NIPA has only the APA designation for a defined contribution administrator as the APR designation is designed specifically for individuals involved with securities sales and sales assisting. There are approximately 600 people with the APA designation.

The movement of ASPA’s programs/courses toward the defined contribution industry (PA-1 A & B and Daily Val, specifically) has been geared toward those new to the business whether they work in a TPA firm or not. The courses are marketed to brokers, insurance companies, financial planners, CPAs, etc. as a way to get schooled on basic knowledge quickly and cost effectively. Over 8,000 people took these introductory courses in 2001 so the courses must be reaching significant numbers of people in these related disciplines. The PA-1A course, including the exam and all reading materials, is offered over the internet.

The ASPA exams sunset after 8 years meaning that an exam is valid toward a designation for up to 8 years after it is completed. NIPA exams sunset after 5 years, so an employee effectively needs to complete all 6 exams in a 5 year period or they will need to re-take expired exams. The ASPA PA-1A & B and the Daily Valuation exams are open book and may be completed whenever the candidate is finished. The C-1 and C-2 DC exams are computer generated through Pro Metric Learning Centers (fka Sylvan) and may be scheduled in a 30-day window during May and November, at the candidate’s convenience.

NIPA grants credit for exams 1,2, and 3 for any person holding the QPA designation from ASPA, so it seems to make sense to use ASPA as the “beginning” set of courses, then transfer to NIPA for exams 4,5 and 6 (APA designation) if the employee desires the APA designation. Alternatively, the employee could complete the work for the CPC designation or the employee could do both. The APA course allows the candidate to choose either part 3 DC or part 3 DB, but does not require both. NIPA exams are offered on a single day in paper and pencil format, once in May and once in November.

Over the last few years, ASPA has become a significant lobbying force to Congress thanks mostly to our Executive Director, Brian Graff. Brian was formerly a staff member of the Joint Committee on Taxation and has enhanced ASPA’s position as a congressional advisor for the private retirement plan industry. Of course, politics play a role in this more than we would like.

The beginning parts of the ASPA program are specifically geared for lower level people or experienced people wanting to finally earn a designation of some sort. This education/training program brings all employees up to a minimal knowledge level and the costs are very reasonable, even if the employee pays all. In short, it is not an intimidating task faced by a new person to the business. If they choose to stop after beginning the studies, the firm still wins because the staff learns the concepts and definitions to do this work correctly.

PA-1A & B and Daily Valuation provide basic education of the entire spectrum of qualified plans and 401(k) Daily Valued Plans for the beginner (although some experienced people don’t know as much as they think they do!). The manuals may be photocopied, so the $99 is paid only once per cycle. The exams are open book (scantron sheets) and may be mailed in anytime during the calendar year cycle. Even though they are open book, we have students who fail to get the 90% pass mark. It is possible that a motivated person could do all three in a single year, or over 12-18 months otherwise. The cost is $80.00 grading fee and the $99 spread over the number of takers. This makes it better for the employee who is paying all. These could be required courses (as some companies do) as part of their training program or as a prerequisite for keeping your job. They were essentially designed for those two purposes. The employee gets a certificate after completion of each of PA-1 A & B and Daily Val course suitable for framing. This is good for ego and group motivation.

Whether the employee goes beyond these three courses becomes a personal choice, the individual’s level of motivation and dedication to the industry as a career. Even if they don’t go further, they have received basic knowledge about DC and 401(k) plans and what daily valuation is all about.

As employee progresses, if they want a designation they can complete

1. Course C-1, Administrative and Qualification Issues of Retirement Plans, cost is $500-600 depending on what books are actually needed and/or can be borrowed from the office. There is a weekend review course available for about $500 taught in Chicago.


2. Course C-2 DC, Administrative Issues of Defined Contribution Plans, cost is $500-600, but may be less since some C-1 texts are used again. There is a weekend review course available for about $500 taught in Chicago.

After these 5 tests (PA-1A & B, Daily Val, C-1 and C-2 DC), employee joins ASPA and earns the Qualified 401(k) Administrator (QKA) designation. If they do not go beyond this level, the firm still benefits because the employee has a nationally recognized 401(k) specific designation.

The employee can earn the QPA designation by completing the C-2 DB course, cost is $500-700 depending on which texts are used. Admittedly, this exam is the most difficult up to this level and some may choose to not try it unless they have some defined benefit experience. Experienced people who move over from other firms may have some DB plan exposure. Math skills are required more so on this exam. This designation may be unattainable except for the most serious student. There is a weekend review course available for about $500 taught in Chicago.

After the QPA designation is earned, employee can choose to finish the APA program under NIPA by completing parts 4,5, and 6 or can go on to complete the CPC program in ASPA by taking exams C-3 and C-4. At the QPA level, the employee has already earned 2 certificates and 2 designations (QKA and QPA). By earning certificates and designations in a progressive fashion, employees should be more motivated about doing it and feel successful in their endeavors. The NIPA program is an “all or none” proposition, work all the way through and get the APA or get nothing, even if 3,4,or 5 out of 6 are completed.

Generally the exam costs are comparable, running around $500 + or -, except for PA-1 A & B and Daily Valuation which run about $179 if original manuals are purchased for all candidates. Membership fees are also comparable. ASPA provides 25% to 50% discounts for 2nd and subsequent members. ASPA offers only individual memberships whereas NIPA offers corporate memberships. Corporate memberships may purchase discounted study guide and exam fees.

The attached spreadsheet gives some details on course content as available from the NIPA and ASPA web sites and other published course materials.

#5 actuarysmith

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Posted 10 June 2002 - 04:03 PM

Wow!

Looks like you got a great answer from a man who knows his stuff............. (Mike)

#6 Mike Kimball

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Posted 10 June 2002 - 04:13 PM

Fortunately, i had just undertaken a complete review for our own use, so I thought I'd share it with the subscribers.

#7 kowen

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Posted 11 June 2002 - 07:39 AM

I've been on the plan sponsor side of the business for about 4 years and am about to complete the CEBS program. Most of the providers/vendors we have looked at seem to stress that they provide incentives to their administrators to participate in the ASPA program. I plan on taking the ASPA exams next. Good luck in what ever path you choose.

#8 CCarter

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Posted 11 June 2002 - 08:36 AM

Mike - Thanks so much for all the info! I've decided to go the ASPA route. :)