Transition of records

[Doghouse]

This question seems to come up everywhere I have worked. We are a non-producing TPA firm. Not CPA's. We do have an actuary on staff.

When a client terminates our services and moves their plan to another TPA, what is our obligation to provide copies of documents if the client has left owing us money, or if the client refuses to pay for copying costs? By documents, I mean plan documents, prior 5500's and admin reports, etc.

Our administrative service agreement has its own issues and really needs to be revised, but I'm wondering what our constraints are outside of the service agreement.

Thanks for any input!

[david rigby]

This is why you have a service agreement. Specify.

[Doghouse]

This is why you have a service agreement. Specify.

Let's say I'm rewriting the master service agreement and I want to make the terms as favorable to us (the TPA) as possible.

[rcline46]

Do you engage a CPA to do your corporate taxes? What does your agreement with the CPA state about their work papers? Are you less of a professional? If not, then use similar language.

[Bird]

We take the position that if it's something we already gave them (and we prepare a comprehensive annual report with just about everything in it), then we have the right to charge for copying and giving it to them again. I don't think it needs to be in a service agreement; it's just common sense.

[Peter Gulia]

rcline46 gives the helpful suggestion that a TPA might prefer to be no less professional than an actuary, lawyer, or nonattest certified public accountant might be. Some practitioners in those professions do state engagement provisions for a retaining lien in a document (paper or electronic) that includes the practitioner’s work that hasn’t been fully paid for.

Making a careful provision involves attention to:

• States’ laws (including law concerning contracts and property),

• relevant professional-conduct law and rules, and

• rules for practice before the Internal Revenue Service [Circular 230].

As Bird mentions, some practitioners consider it reasonable to charge for an extra copy of a previously delivered document. Some also won’t deliver an extra copy until a retaining lien is satisfied by payment of outstanding fees.

In some circumstances, it might be possible to rely on background law or common sense. But it’s often stronger to have a written agreement that states the client’s assent to the practitioner’s protections and provisions.

[mbozek]

This question seems to come up everywhere I have worked. We are a non-producing TPA firm. Not CPA's. We do have an actuary on staff.

When a client terminates our services and moves their plan to another TPA, what is our obligation to provide copies of documents if the client has left owing us money, or if the client refuses to pay for copying costs? By documents, I mean plan documents, prior 5500's and admin reports, etc.

Our administrative service agreement has its own issues and really needs to be revised, but I'm wondering what our constraints are outside of the service agreement.

Thanks for any input!

What about the most common sense answer- You will provide copies any any document requested after the client pays the amount owed or the copying cost in advance.

[Doghouse]

Well, mbozek, maybe it goes without saying that I want the amount owed AND the copying costs in advance.

While I realize I can compare the TPA firm to a CPA firm, I suspect that CPA's are forced to provide more information then they think they should need to. I don't see why we would want to sign up for that voluntarily. What our policy will be is one issue, but in developing that policy I would like to know the framework of what is actually required. I will have it reviewed by counsel as you suggested. Thank you for all your comments!