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pjbaer

Prior TPA Not Cooperating

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On occasion we take over TPA services from another TPA firm in the area.  The prior firm does not cooperate with the transition and in some cases, the plan cannot locate any prior year reports that provides crucial information related to plan assets, census and receivables.  Is there any formal organization where the plan can file complaints? 

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Not having kept adequate records itself, sorry to say but the first place for the plan to complain is while standing in front of a mirror!

Is there a reason why the former TPA is not being cooperative?

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This seems to be a standard when a client moves onto another TPA.  We usually hear lack of response or high invoices as the reasoning for finding another firm.  The one that we just took over also has a new day-to-day contact.  It is a medical practice and the doctors don't pay a lot of attention to detail such as ensuring that they have all of the reports needed before terminating services. 

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We go through this more times than I care to remember.  But my 2 cents hit the nail on the head, how can the client not have these documents?  My guess is that most, if not all of the important documents have been provided to the client, they probably are unaware or forgot where they placed them.  Good start would be with reviewing all emails from old tpa.  Good luck.

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While I agree the client needs to keep the records there are TPAs out there that are just plain jerks. 

Back in the '90s I worked in a town that wasn't huge.  So all the various people who did record keeping/TPA work in town knew each other pretty well.  There was one bank that sold the trust services and record keeping combined.  The guy in charge got it in his head that it helped keep clients from switching by making it a policy to be a big pain in the rear in terms of conversions.  He had decided if he made it painful enough the rest of us wouldn't bother to solicit his clients.  (He was wrong by the way.) 

Their policy was to drag their feet.  To provide all data on paper.  (We once landed a 1,000+ life plan and they sent us all the account balance data on paper).  The client hadn't paid all the invoices it turned out and withheld payment until we got electronic versions of the data. 

So yes the client is wrong.  Maybe the former TPA should get paid.  I have worked for plenty of TPAs that charge a deconversion fee that was reasonable.  Since we were paid we always gave were very cooperative in regards to the process.  But there are unreasonable TPAs also.  And there isn't much you can do about it. 

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i suggest looking at Circular 230, and also see if the TPA is a member of ASPPA or another trade group with its own code of ethics.

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I am really surprised that these type of "uncooperative" TPAs seem to survive.  When I worked for a TPA and we had advisors who spread their book around, we used to tell them (the advisors) to add a request of TPAs in the RFP process (or what ever selection process they used).  The request was to provide the names and contact information of any business LOST that went to one of the other TPAs being considered in the search.  Failure to provide any was disqualifying.  Providing names that said the transition was painful to another provider was disqualifying.

Stopped the belligerence almost immediately.

 

This is a small industry and unfortunately the number of true "professionals" is even smaller.  Time to call them out on it.

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