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New TPA: what is transferred?


Guest Key Lime Pie

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Guest Key Lime Pie

We have the situation of a prior TPA who is refusing to send any information whatsoever related to allocations for a series of recordkeeping plans that they have decided to no longer service. are there any guidelines on what needs to be sent or can they get away with this and new tpa needs to start from scratch, hoping to assemble everything, including historical data, inputting manually all current balances, election forms, etc. etc?.

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Disagree. Professional courtesy.

There may also be issues w/r/t outstanding invoices and/or service agreement.

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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If the TPA is 'unloading' the plans, then professional curtesy would dictate helping the plans get transferred, which would include providing the information in electronic format. I agree that outstanding invoices/issues are an impediment that needs to be resolved.

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To be fair, we have given and received courtesy from other professionals. But we've also chosen to be less-than-courteous when dealing with less-than-professional organizations who more or less demand our records, and in a format of their choosing no less. So it depends. Looking at this one more closely, I guess if we were getting rid of the plan(s) for reasons other than non-payment, we'd expect to provide info. But the new tpa should be prepared to work from client records, and if they're not available, to say, "sorry but we can't handle the plan."

Ed Snyder

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Guest Key Lime Pie
If the TPA is 'unloading' the plans, then professional curtesy would dictate helping the plans get transferred, which would include providing the information in electronic format. I agree that outstanding invoices/issues are an impediment that needs to be resolved.

Thank you for your opinion. Yes they are unloading the cases with minimal notification to clients and they are showing no professional courtesy to client or sucessor tpa's. In fact after their immediate lay off of the staff who serviced those plans, they started to claim they don't have staffing to provide info to new tpas and they have even suggested they would charge the clients for a minimal transfer of photocopies.

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Key Lime: BG5150's comment is very important. A TPA is not paid to be an "off-site storage" for a client who fails to keep good records. It is not the TPA's responsibility to keep records for the Plan Sponsor -- the Plan Sponsor has an obligation to do so.

When a client leaves us we send them a letter suggesting that they review file and determine if they would like copies at no charge from our files. We do require them to detail what they want since the lazy person (who probably kept no records, or at least not organized in any fashion) will just say he/she want a copy of everything. For 90 days we will honor any such request. Thereafter, a fee will apply to reflect that files have been moved to storage. I note that our files are stated to be our property in writing, so there is no confusion there.

Bird also makes a great comment. If you want a prior TPA's courtesy, be sure to be courteous. Earlier this year I had one of those calls where the new service wanted specific filtering of data, in a special format. They wanted us to do this to make the transfer to their systems no effort for them. It is interesting that the client later told us that they were charging a huge fee for "setup services". I note that the client came back to us once they found out that we could work with the change of investment product, and experienced the "beauty" of that other service.

I always try to be courteous to a new service representative, since one never knows when the "shoe will be on the other foot". I am sad to say that on occassion, the new TPA will be arrogant and down right nasty. They need to keep in mind that I'm doing them a favor! I don't have to provide anything, and yes I do have that in writing under the Sponsor's siganture.

Lastly, I always assume that I must get all past records from the Plan Sponsor when we get a new client. Neither you or I have any right to expect something from a prior TPA. If we do get something, that is a true bonus.

Having braved the blizzard, I take a moment to contemplate the meaning of life. Should I really be riding in such cold? Why are my goggles covered with a thin layer of ice? Will this effect coverage testing?

QPA, QKA

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Truth be told, the clients should have all that stuff. TPA's are not offsite storage of plan-related documents and reports.

However, though. There is nothing to say you can't impose a reasonable copying and transmission fees if you are sending stuff the ER should have to another organization.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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My opinion has always been (as a TPA) why make the last experience someone has with you miserable? They'll complain about that more than whatever it is that got you fired in the first place. What's it cost to print out a few reports? Nothing!!

Not to mention that it helps to have the respect even of your competitors. The more people that think you're a reasonable person, the better...

Austin Powers, CPA, QPA, ERPA

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My opinion has always been (as a TPA) why make the last experience someone has with you miserable? They'll complain about that more than whatever it is that got you fired in the first place. What's it cost to print out a few reports? Nothing!

What does it cost to re-run and ADP test if you change two or three compensations? Nothing. But we charge for that work.

What does it cost to change some entries on the Schedule I if you got incorrect data? Not much, but we charge for it.

How much does it cost to draft a Loan Note & Security Agreement? Not much, but we charge for it.

We charge (sometimes) for copying material that the Employer should have because: 1) it takes my time away from clients who are paying us to do my job; 2) the support staff here has to take time out of their day to scan/copy/mail things and not support the administrators (who are supporting the paying clients) and not support the internal business to which they need to attend.

Many times, clients leave, not becasue they are unhappy with our services, but for the promises of (to borrow a NASA catchphrase) "better, cheaper, faster" (though it usually is none of those). Keeping in that mentality, the former clients believe it will be "better, cheaper, faster" for them to just ask us for the material.

I normally do not charge for administrative reports (census, distributions, contributions), or even financial data (mutual fund positions, earnigs statements, etc). But I draw the line at having to (or have the support staff do) scan or copy stuff liek plan documents, 3 or 4 years of ADP testing or profit sharing allocations.

I know very well the old business adage of: give good service and people will tell 3 or 4 other people, but give bad service and people will tell 7 or 8 other people. And I do a very good job, I think, of preserving my firm's reputation among my current and former clients. But, I also refuse to be taken advantage of.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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Guest Key Lime Pie

Sounds like there is a general consensus, other than rcline and Jim Chad that even if the firm is expunging itself of the clients, it owes nothing to the clients or new tpa's since it has all been provided, usually in the form of printed reports. Let the new tpa do the manual data entry of monies by investment and source from the printed report as their investment in their new client.

I think there is a difference between redoing work because the client provided bad information or lost something (and all of RBS150's examples), which we always charged for, vs. giving up the client and doing next to nothing to help them or the new provider in the switchover.

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Sounds like there is a general consensus, other than rcline and Jim Chad that even if the firm is expunging itself of the clients, it owes nothing to the clients or new tpa's since it has all been provided, usually in the form of printed reports. Let the new tpa do the manual data entry of monies by investment and source from the printed report as their investment in their new client.

If we are doing the daily record-keeping of the funds, we send the electronic download of the fund positions at liquidation to the new r/k; we are not going to make them do that manually. We charge for that, it is part of our "de-conversion" fee. However, if the assets are at a brokerage account or another fund house, we don't provide that information, it is up to client to get it to the new TPA.

If the new TPA wants things the client should have--documents, allocations, testing packages, 5500's--I can, and often do, charge for the duplication and transmission of those items.

QKA, QPA, CPC, ERPA

Two wrongs don't make a right, but three rights make a left.

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Well, I'll weigh in on this. The situations are of course wildly variable.

In general, we value professional courtesy, and try to give it. This does NOT mean working for free. If we are requesting data from an incoming client, that client will be expected to pay their prior TPA's charges for any information that they must get from their prior TPA.

If authorized by the client who is leaving, we are happy to provide anything we have in the way of valuations, documents, etc., but for a reasonable fee. We don't give it away (we wouldn't charge for something trivial like a quick question or two about our documents or sending a copy of the 1-page mandatory rollover amendment, for example, something like that.)

If the new TPA doesn't like our format, they can fry ice - it's their responsibility to take the data and put in any format they want or need - not our responsibility. Every single thing being requested by the new TPA is either something the client should already have (we automatically provide the client either originals or copies of everything) or something that was never sent to us in the first place.

If a client is unwilling or unable to get us the data we need, we have to refuse to accept the case. We often end up talking directly with the prior TPA's, and we almost always find them to be cooperative, but again, justifiably unwilling to provide stuff for free. As a prior poster mentioned, there are often situations with bad blood or unpaid fee disputes. Since we have no knowledge of who is in the right in these situations, we don't judge - we just ask for what we need, and if we don't get it, we refuse the case.

Naturally, you will sometimes get a rotten apple who is completely unprofessional, but that's a rarity. Our approach is to extend the type of professional courtesy that we would hope to receive, and leave it at that - and we don't expect professional courtesy to extend to unpaid work on the part of a prior TPA.

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Key Lime, I think most everyone will agree that the TPA is not responsible to account for the failure of the client to keep proper records. While most TPA firms are professionals, I recognize that a few will not have standards as they should. However, if what you are seeking are items that the client should have in their files, try not to cast stones at the old TPA. Afterall, if the client is irresponsible with that prior TPA, what do you think they will be with you. You may be the best service, but even that can't stand up to a garbage client. Best of luck to you.

Having braved the blizzard, I take a moment to contemplate the meaning of life. Should I really be riding in such cold? Why are my goggles covered with a thin layer of ice? Will this effect coverage testing?

QPA, QKA

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Key Lime. You have received a lot of good, reasonable advice here.

From the other side of the table, we rely on our TPA and get information and help from the TPA when they can provide it. It's a good working relationship.

But in the end, we, the Plan Administrator, have the responsibility and liability for our documents and records. That's why we file what they send, and why we check their numbers.

We expect professionalism and courtesy, but we also expect to have to pay for any extra work we request. And we're rarely disappointed. :D

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I've had other TPA's send me the relius file. And I would do the same if asked with the client's permission of course. You all seem to be referring to big projects. If an ex-client asks me for an excel download of the census report, I consistently provide it for no charge, and by the way I have often requested it from prior tpa's and heard of no charge. If I was going to charge for waht I as referring too, I wouldn;'t charge more than $75, if that, and again I just don't think it's worth the bad blood.

Austin Powers, CPA, QPA, ERPA

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Austin - Perhaps I am wrong, but I don't think the issue was simply a "Relius File". Instead, at least I am speaking of when we are asked for YEARS of back reports, filings and plan documents. I am talking about being asked to provide a truck load of documents -- all items that were previously sent to the client.

As example, a prior TPA should never need to provide a copy of the current SPD. Isn't that something all clients should have on file? Of course, if the client was never provided with an SPD, that raises other problems.

Anyway, this is the situtation that I was refering to in my posts. Perhaps I misread the OP, but that was what I thought the situation was.

Having braved the blizzard, I take a moment to contemplate the meaning of life. Should I really be riding in such cold? Why are my goggles covered with a thin layer of ice? Will this effect coverage testing?

QPA, QKA

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