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Dave Baker

What's a better name than "TPA"?

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"What you need is a third-party administrator."

-- "A what?"

"A TPA."

-- "I'm still clueless. I have an investments guy and a mutual funds company that says they'll keep track of where my company's retirement contributions go. What's a TPA?"

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Wouldn't it be great for business development, and more appreciation by plan sponsors, if there were a better name for TPAs than "TPA"?

On your marks, get set ... GO.

 

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Retirement Plan Consultant.  We take care of all that pesky compliance stuff with the IRS and DOL that those other guys cannot.

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Actuary

(No, I'm not advocating that others use that term; I'm advocating that plan sponsors hire an actuary.)

BTW, in my 40+ years of observation, there are many TPAs who have little understanding of consulting. 

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On 7/24/2020 at 5:03 PM, david rigby said:

Actuary

(No, I'm not advocating that others use that term; I'm advocating that plan sponsors hire an actuary.)

This message brought to you by the American Society for the Employment of Actuaries :lol: Though as someone who is currently waiting on results from EA-2L I can't disagree too much with this perspective.

To the original question, when someone asks me what our company does (and they want the short version), the top 3 things I would mention would be plan document work (Legal), testing and calculations (Compliance/Consulting), and processing contributions and distributions (Administrative). So if you asked me for a better name than TPA I would suggest something like an LCA (Legal-Compliance-Administrative or Legal-Consulting-Administrative - take your pick) Firm.

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I wouldn't say to clients that documents are "legal" work, as that my imply that lawyers are involved.

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Well, the document was written by a lawyer at some point - however, point taken, we wouldn't want to imply that we have lawyers on staff. Maybe Document-Consulting-Administrative?

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1 hour ago, BG5150 said:

I wouldn't say to clients that documents are "legal" work, as that my imply that lawyers are involved.

 

3 minutes ago, C. B. Zeller said:

Well, the document was written by a lawyer at some point - however, point taken, we wouldn't want to imply that we have lawyers on staff. Maybe Document-Consulting-Administrative?

Since the tax industry (and others) have spent lots of time and money defending the position that checklist document preparation is NOT the practice of law (therefore not prohibited as unauthorized practice of law) I would stay far away from implying that anything you do is "legal work" unless part of what you do is authorized practice of law.  There are still plenty of ABA members who would love to cut out part of what we do as TPAs and CPAs. 

I like consulting.  If they need more descriptors, consulting-compliance-admin.

 

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Since our firm does do actuarial work, I say we are "actuarial and benefit consultants". As a description,  I say "we do everything that needs to be done for a retirement plan except handle the investments."

That usually gets things started.

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At least people don't say "Oh - you're in insurance?" like they used to back in the day when I started in retirement plans and said I worked for a TPA 🙂!

 

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Interesting how TPAs will shy away from the word "legal" so as not to imply that they have attorneys on staff but have no qualms saying they do actuarial work even though they employ no enrolled actuaries. 

What is the difference between outsourcing the legal document, which is what you do by licensing pre-approved plan products, and outsourcing the actuarial valuation and Schedule SB (or the signature thereof)?

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57 minutes ago, CuseFan said:

Interesting how TPAs will shy away from the word "legal" so as not to imply that they have attorneys on staff but have no qualms saying they do actuarial work even though they employ no enrolled actuaries. 

What is the difference between outsourcing the legal document, which is what you do by licensing pre-approved plan products, and outsourcing the actuarial valuation and Schedule SB (or the signature thereof)?

Who are you asking?

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Another term that I have heard bandied about is "recordkeeper." That may be a bit underinclusive, especially considering the "legal" work some of you do.

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It's like when people ask what I do for a living.

I say I do a little bit of accounting, a little bit of actuarial, a little bit of legal, but I'm not actually any of those. 

Plus consulting.  No licensing needed for that.  (I stay away from asset management completely.)

I might as well be a transponster.

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On 7/24/2020 at 3:57 PM, Dave Baker said:

"What you need is a third-party administrator."

-- "A what?"

"A TPA."

-- "I'm still clueless. I have an investments guy and a mutual funds company that says they'll keep track of where my company's retirement contributions go. What's a TPA?"

=====

Wouldn't it be great for business development, and more appreciation by plan sponsors, if there were a better name for TPAs than "TPA"?

On your marks, get set ... GO.

 

I have railed against the use of TPA to describe what we do since time immemorial.  I have lost that argument, but I still don't refer to ourselves as a TPA and I correct anyone who uses that term with us.  We use the phrase "retirement plan service provider" or just plain "service provider".  Because, I ain't a THIRD PARTY anything!  We're a FIRST PARTY with our clients.  I ask clients if they would refer to their atty or acct as a "third party atty or acct".  Same thing with us. We represent the client directly, not as a third party.  The phrase TPA came from the health insurance industry where there really is a "party of the third part" which is different than the party of the first part (the client) and the party of the second part (the insurance company) who then go out and hire a true THIRD PARTY to do some work on their behalf.  What a mistake our industry has made and continues to make.

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It seems to me that some TPAs are just that, i.e. recordkeepers and distribution processors, but most also do retirement plan consulting (compliance and/or planning). There are also some consultants who do not do recordkeeping or distribution processing. So for a firm that does it all (except the legal or actuarial work), a good term would probably be "Retirement Plan Consultant and Recordkeeper." If the firm is qualified to do actuarial work, then "Retirement Plan Consultant, Actuary, and Recordkeeper." Just a thought. Actually, I've thought about this off and on for years as it comes up, and never could think of a good name.

 

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Is anyone (TPAs I mean) concerned that after PEPs are up and running it won't matter what we call ourselves, or do you think a small TPA firm will still be relevant?  Just curious.  Keeps me up at night sometimes.

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9 hours ago, Gilmore said:

Is anyone (TPAs I mean) concerned that after PEPs are up and running it won't matter what we call ourselves, or do you think a small TPA firm will still be relevant?  Just curious.  Keeps me up at night sometimes.

Not really.  I work for a recordkeeper (offering both bundled, and unbundled - with distribution through hundreds of "TPA's") and the economics of a PEP just make no sense.  I know others are promoting them - but in reality there are ways to aggregate plans either at the sponsor level or at the advisor level (mostly what is driving the market, from what we see) without the overhead of a PEP, and being a PPP.  We've seen the demand from the advisor community to be more of an aggregated approach to how they provide investment services - mostly 3(38) services, and if we add a suite of 3(16) services (which we already do in a non-fiduciary capacity), then we achieve what the advisors want, without having to develop (again!) a MEP/PEP product.

How about "Retirement Plan Coordinator?"  Retirement Plan Consultant would step on the toes of advisors that brand themselves as that....

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9 hours ago, Gilmore said:

Is anyone (TPAs I mean) concerned that after PEPs are up and running it won't matter what we call ourselves, or do you think a small TPA firm will still be relevant?  Just curious.  Keeps me up at night sometimes.

Short answer:  No, Im not concerned.  

The same question was asked when payroll providers started using admin (if you can even call it that) as a loss leader to capture the payroll service

The same question was asked before and after the DOL slammed the door on the fingers of the Open MEP providers

The same question was asked when some bigger national players started gobbling up every mid size service provider they get their hands on

These services will be a good fit to some plans, but nowhere near a majority.  

My clients are with me because of the service I provide, not because I'm $10 cheaper than the other cookie cutter providers.  If a client is only looking at cost, they wouldn't sign with me in the first place.  We are not the most expensive, but we aren't on the low end either.   One of the biggest complaints I hear from people coming from the big national TPAs or payroll providers is that the service aspect just was not there.  It was hard to get a call back, their rep kept changing, they were not flexible enough, "we dont do that" was a common answer, and so on.  That is not how we work.  Most of my clients have my cell phone number, but very few "abuse it".  My clients know that if there is an issue that needs solving it will get solved.  They want and expect a premium service, and for that they need a premium service provider.

If you are a small shop that does mostly very simple admin, that may be different. 

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I think the point of the original question was to come up with a better shorthand description of what we do, to use in conversions with laypeople.  The length of the answers and overall discussion says there isn't anything a lot better.  I will use "TPA" within the industry as you all know what that means.  With new acquaintances, I'll say "I work on 401(k) plans - there's a lot of testing and compliance and a tax return to file."  With clients and prospects I'll use something more on the lines of "service provider - we do all of the nitty-gritty stuff and prepare things for your signature."  If the conversation goes there I will explain that we do some legal, actuarial and accounting stuff but are none of those professions.

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My go-to description of my job in social situations:  I work with 401k plans.  They have a lot of rules and regulations they have to follow, and we help make sure they do that.

 

Because if I only left it at "I work with 401k plans" they think I'm an investment guy.

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Personally, I don't care what it's called. When people aske what I do (which I hate since I am much more than my job!) I just say I work with 401k plans.

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I also say, "We do 401(k) Plans" and add "we are the compliance and government reporting folks" because yes, otherwise, the listener believes we sell investment products.

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23 hours ago, Kirsten Curry said:

I also say, "We do 401(k) Plans" and add "we are the compliance and government reporting folks" because yes, otherwise, the listener believes we sell investment products.

"We are a retirement plan service provider". I often add for additional clarification "we do everything with regard to the retirement EXCEPT handle the money; we account for it and make sure every penny is in the right place, but we don't sell investments or get paid for investment advice and won't accept a penny from any investment firm where your assets are housed".

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