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Nationwide Terminating 300 plus PPA's


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Guest sbewley

Nationwide was the fore runner in the daily valued pension field. It is a shame to see them stoop to this level. Hopefully there are a lot of plan sponsor's viewing this and they are wanting to move their plans. It is only a matter of time.

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Guest LTurner

Nationwide is not the only provider that is having a 'shake out' in the level of services/products in the 401k arena.

I suggest you shop your plan....

Apparently, the tough markets for the past year+ have forced alot of them to reevaluate the profitability of the various centers of their business.

I have several investment providers that have told me they will no longer take any startup plans, and prefer to not work with any plan that will have less than $1 million in assets in the first year. Even take over plans with large assets are being scrutinized based on the number of participants vs.

I have plans right now with numerous providers. (I am a small independent TPA). I am continually seeing change in the market these past 6-12 months. Best advice I have is to determine what exactly you need in your plan (service, investments, insurance, loans, etc.) and start looking for alternatives.

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Guest mbutler

I have watched this thread for weeks and decided to join because of the info. It appears that Nationwide's management are a bunch of bad guys. They apparently are out for their own interests and nothing more. I can assure you alot of plan sponsors view these pages and will take action against this company. I will refer every Nationwide plan I run across to this thread so they can view the information about the people they are dealing with. Does anyone but me feel that Nationwide's guilt is amplified by not responding to these claims? They have to know this thread exists by now. Has anyone thought of taking legal action against these people? There should be a good case here based on the information provided. What a bunch of boobs!This will be the down fall of the mighty Nationwide!!

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Guest Richard Koreto

I've been finding this thread interesting and am considering writing an article about this situation. I would like to speak with affected individuals to get some more details. If anyone is interested, please contact me by phone or e-mail. Thanks!

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Guest Deceived

Our TPA firm was opened in late 1997. In late 1999, our sales person was contacted by Nationwide in an attempt to get our firm to become a PPA for our area. We issued several requests from about September 1999 through February 2000 for further information on the contract. After being assured we were not getting into anything that would lead us to ruin and that the potential for income on our part was immense, we agreed to sign the PPA contract and begin working with Nationwide effective in March 2000. Within the next two months, our sales rep (who also happened to be one of the owners and a member of our board of directors) came down with a mysterious illness and was unavailable to our clients/referral sources/etc. for anything more than half days a very few days each week. This owner also began disappearing during the day to locations unknown to others within the company. Finally, in August 2000, this owner turned in a resignation and opened the doors the very next day to their own business. An office had already been established and all information on our company server (including client lists) had been downloaded from the server to this owner's personal computer. This owner was so enthusiastic and adamant about the contract between our firm and Nationwide we have surmised that the end result was due in total to that contract. Through this owner's insistence, we understood that the only person that could be listed in the contract as agent was one with an insurance license resulting in the contract being in the sales reps name (can anyone verify this for me?) In addition, our firm (and not the agent) had to be listed as the ones responsible for the payment of any expenses that may have been incurred. So what we ended up with was, bills to the company, payments to and contract in the name of the sales rep. This sales rep is now a host of the broker seminars in our area. Fortunately we haven't lost everything but it sure isn't because the sales rep didn't try to ruin us.

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Guest dubya

Despite what seems to be blatant, unethical business practices, 2 important question are, what does your contract with Nationwide say and did Nationwide deliberately attempt to mislead anyone? On the first question, it would appear that everything that they've done, despite the unethical nature of it, has not in fact violated their contract with you. Although I'm sure that no one would now sign the same contact with Nationwide, you cannot expect the other party that you are in contract with to look out for your best interests. Thats what your attorneys are for. And if your attorney did not foresee this happening, then perhaps he/she is the one who you should be even more upset with. I'm not saying that what Nationwide did is fine or to be expected; I am saying that if their legal staff knew all along that this could happen, so should your lawyer(s).

As for the second question, some of the replys here would seem to indicate that Nationwide did in fact attempt to mislead, Deceived's post being the most recent one which seems to bear this out. Although not an attorney, I have to believe that some cases could be made due perhaps (in terms Microsoft could surely understand) as a result of their "deceptive and predatory business practices".

FYI, I am not with Nationwide and have never done any business with them. I also happen to agree with all of you that if this had happened to me, I would be hopping mad. But, my point is that worst case scenarios have to be considered before signing any contract, especially when the other signee is bigger and has more money than you. Whoever reviewed the contract and couldn't foresee this happening is the one who I think should shoulder most of the blame.

In any event, word of mouth of what they are doing is a good weapon. I can say that as a result of this thread, I will continue to avoid Nationwide in the future. I have also passed this information on to 2 other TPA firms who coincidently enough were looking to do business with Nationwide and had no idea that this issue existed.

What would be helpful is if some brave Nationwide representative joined in this thread (even anonomously) to offer another side to the story. Many of us would be interested to hear their side of the story.

:)

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Guest Deceived

Your points are very good. Unfortunately, the attorney we used was also a friend of the former sales rep. In our case, the sales rep, Nationwide and the attorney were all blameworthy of unethical behavior.

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I don't really have anything new to add, but had to get my 2 cents worth in about Nationwide. I have never had such horrible service from any other investment company. As a PPA, we were required to do everything. It was the most labor intensive relationship you could imagine. (on our part of course) As a new employee, I couldn't get any help from my contact at Nationwide. She never returned my calls or played childish games like leaving messages during lunch or after she knew I had left for the day. Their software was garbage. If I could get any info. from the contact, half of the time it was wrong. And she once had the nerve to tell me that the PPAs that they had terminated for poor sales didn't even get a rep! They just had to call a "pool". I had to quit my job to get away from that horrible company. I was so delighted to see this thread! Now everybody knows what I had to go through!

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Guest consultant

I feel that most of the insurance companies are bad. Some worse than others. TPA's and consultants should do the right thing and steer their clients away from such injustice. Insurance companies have run their course by providing services that were not available in the beginning of daily valuation. Now they over charge for services that are common in today’s market. Nationwide is apparently trying to stay ahead of the curve but it appears to be to late. The market will follow the consultants and tpa's since they are the ones who provide the services the client can see. Nationwide has made a big mistake and they may or may not survive to see the outcome. When companies get greedy and think they control the universe, it always comes back to haunt them. We know the secrets of Nationwide and will be sure to share them with the financial community. Nationwide does not control they 401(k) arena although they might think they do. Did anyone notice how few plans they wrote last year? I bet it was a said day in Columbus when the management saw they wrote fewer plans than ADP! (I thought they were a payroll provider :) Keep up the good work you guys, the end for the great Nationwide appears to be drawing to a close. Maybe someone from Nationwide should join this thread so they can explain why they have screwed so many people if they can take the time from their PR repair. I would have to agree that the information here makes them look really bad. Everyone should send this thread to everyone they know and let them take a look at it. If you are a plan sponsor reading this, cash out and move. If you are a consultant or tpa selling this crap, shame on you. Try great west, they may be free but the won't sell you out (but they suck too). To everyone else, give up the variable annuities and go sell something, which requires a license and doesn't over charge the participants by an enormous amount. The days of 2% commission are over so you had better get used to working for your money. Peace and good riddance to the mighty Nationwide and all of the other insurance companies! Long live Executive Life, Mutual Benefit and New York Life, sorry, I meant Nationwide Life. Cheers. If the management of Nationwide would like to Email me, please feel free. I will be more than happy to explain your situation to you since you apparently do not understand good business practices or policies, but you guys are god's and you don't have to worry about it do you. Evryone keep posting their opinions since this is a public forum and there is nothing they can do about it. If they would like to try, contact O.J. Simpson, he will tell you like it is. And by the way Nationwide, your trust product really sucks as well. Nice try, but I think you could have tried harder.

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Guest consultant

Just a refresher to put this thread back on top. Anything new going on with this situation? Nationwide is going to release earnings at the end of the month. It should be interesting!

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I have been an administrator for quite a while and have worked with Nationwide as well. I've been following this message board for quite some time, and I find it interesting that so many people are willing to jump on the bandwagon and believe allegations just because someone says they are so. Remember, that there may be some hidden agendas here...everything may not be as it seems.

Why doesn't Nationwide respond? It wouldn't matter. You would beat them up for their response - heck, you'll probably beat me up as well. Possibly there is a reason why some PPAs have been terminated? Oh, I forgot...we are all perfect and never lose clients for poor service. I know I never have!

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Guest consultant

You are probably right NYC, don't you find it odd that their have are numerous people who have had similar problems? This is an open forum and people are free to post their opinions, questions and so forth, that is why this website exists. "everything may not be as it seems." But they may be, take a look at Nationwide's 10k filing and look at the drop in assets in the separate accounts.

"Why doesn't Nationwide respond? It wouldn't matter. You would beat them up for their response" - because they know that the decision they made was a bad one. They have put out annual reports stating PPA's are one of the top three distribution channels for their product and have failed to inform the shareholders that the management made a decision to ruin this part. They have never wanted the PPA's to communicate and know what is really going on.

"heck, you'll probably beat me up as well" - this is public forum and I for one like to hear opinions and yours is certainly welcome. I am glad to see you have never lost clients as well! :) Good luck with your Nationwide adventure, maybe you will be one of the luck ones and get out with your shirt!

Are you a Nationwide employee by some chance? I find it kind of odd that you would post this message if you were a PPA. Maybe Nationwide is responding and we just don't know it! As I have always said, "the ignorant always loose in the end". Have a nice day!

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  • 3 weeks later...
Guest consultant

I am just checking to see if there is anything new going on with Nationwide. Did anyone see the Nationwide Destination Funds press release? What a joke, just like the company! Still trying to screw everyone aren't you Nationwide!

I guess everyone will have to wait until years end to really see the how their decisions will affect the bottom line. My guess is that it will have a negative impact, but their individual annuity sales are really up which will offset the loses.

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Guest lharris

More injustice from Nationwide. ...If your not in the "inner circle" as a PPA, you should just forget Nationwide. The most formidable PPA that Nationwide owns practically owns Nationwide. They have the RPSM's wrapped around their fingers. I couldn't beleive this but a buddy of mine lost a nice plan because the RPSM worked on the broker till they folded and sent the business to an out of state PPA! Go figure, right? Later, he finds out that Nationwide's PPA has got the guy's kid as their own wholesaler, so you know they get all of that territory's business. If your a local and your doing a great job it just doesn't matter. Their all sending the business from PPAs to the EPPA. (extremely preferred pension administrators). Why bother having the rest of us at all?

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does anyone know what could happen now that NW has bought up Provident Mutual?? Will the provident products (selector k funds/administration servicing) fall into the state of nationwide ppa terroritory? I realize this transition will take a year or two but it would seem that there will be some fall out from this purchase somehow.

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Guest consultant

MJ:

It sounds to me like Nationwide is absorbing the Provident Mutual business into its current structure. This may be the reason why Nationwide decided to terminate most of its PPA's. They have always wanted a true "turnkey" rather than the "hybrid" they have operated for some 10 years. No one will know for sure until this deal is done, Nationwide is not going to disclose the facts until the deal is done. The press release which Nationwide put out does say:

"In addition, Provident Mutual's 768 career financial

consultants, 1,100 independent agents, its affiliated broker-dealer 1717 Capital Management Company, and retirement savings sales force will provide Nationwide Financial with important new distribution and growth opportunities."

One would have to assume that Nationwide intends to compete directly with the brokers and PPA's for the same business by using its captive agents and employees much like Northwestern Mutual and Principal Financial. Geez, another 1,868 people selling Nationwide products and another money manager to "expand" the poor performing, over priced Nationwide family of funds. This moves also could be an attempt to regain some market share in the retirement area. Like some famous person once said "If you are down for the count and you can't steal anymore business, buy whatever is available, cheap."

What is the best way to increase your companies bottom line? You make sure your only competition is yourself.

In response to lharris - your story doesn't surprise me at all and has been going on for several years. Since the inception of Nationwide Trust Co., NFS has "included" PPA's as directors in the company which gives them the same advantages you stated and direct access to information that none of the other PPA's have.

It's like organized crime, you use all the muscle you can to squeeze, slide, steal and strong arm yourself into the position you wish to be in. Loyalty and hardwork is only appreciated while their "EPPA" is signing an agent of record letter stealing your case because of the direct endorsement from Nationwide. And don't expect a thank you for your plan card or even a christmas card after they steal your business. What can you do about it? Not much except protect what you have by moving it to a company who appreciates it.

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Guest lharris

Yes, I sure have heard that before about certain EPPA's being officers and directors at NFS. That doesn't make a whole lot of sense for Nationwide to do because it really looks bad to the other PPA's. But then again, if your going to dump the gal anyways why be scared she'd find you in bed with all those other gals? That is about where Nationwide is heading, don't you think.

If you all haven't had your eyes opened by Nationwide's rampage s****ing of PPAs, nows a good time to consider getting out from under there wings. Anyone who wants to work against that kind of politicing is just going to be bullied into leaving. Good thing is we got this forum to learn from others mistakes and I'll tell you what, I know some brokers are getting on here and printing this stuff out to steer their people from any notion that they ought go with Nationwide. What comes around goes around!

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Guest consultant

You are right lharris about being caught in bed. I am sure as the year progresses that Nationwide will be caught with their pants down several times.

As far as getting out from under their wing, I think they have already done this for many PPA's. Lets be real, you can't sell our junky product but we will service your existing business (at least until we steal it from you). Why would someone continue working under Nationwides agreement? How do you grow your business and generate income if you can't sell? If you have not been terminated, how do you know for sure that you will not be the next? They want ultimate control over the business owned by the PPA's and serviced by Nationwide. Maybe someday they will see their mistake which will be when they enter bankruptcy court. Nationwide is a bad company run by bad, self dealing people. They will get in bed with anyone until it no longer benefits them, then they toss you out on the street.

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  • 3 weeks later...
Guest clayman

Anyone out there have details on the Nationwide deal to be the exclusive PPA for Suntrust's qualified plans? One of my Suntrust clients has mentioned this coming up real soon but does not have many more details. This could be a real boost for us all if its true!

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  • 3 weeks later...

I heard there was a class action lawsuit filed against Nationwide. Does anybody know about this? Who are the named plaintiffs? And does anybody know how I can get a copy of the complaint faxed or e-mailed to me?

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  • 2 weeks later...
Guest consultant

edemby,

You can get a copy from here http://www.ctd.uscourts.gov/

You are required to pay .07 cents a page and you can get it electronically. The total cost will be less than $4 for a copy of this complaint.

Or you can drive over to the court house and get a copy if you happen to be in the area of Hartford.

Either way, you only need the cause number, which I am sure you already have.

:D

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Guest InterestedPerson

I have found this particular thread quite interesting. At the outset, I am a former Nationwide employee. I do not have 'inside information' nor involved in any way in the decisions that resulted in the terminated PPA issue. My position at Nationwide did allow me to observe the various business units w/in Nationwide Financial and my comments are intended to be observations. I am not a disgruntled former employee and in no way intend this to be construed as the rantings of a former employee. My reason for leaving was primarily due to the fact that my values and future goals did not fit into Nationwide's current 'direction.' That happens and luckily we still live in a free country where opportunity abounds (a fact we all need to keep in mind these days).

In my opinion, the decision to terminate PPA's (and other decisions made by the various business units) is the result of having a share of NW Financial owned by the public. When you have to change from being 100% owned by your parent (who is a mutual company) to having to deal with quarterly earnings estimates and meeting earnings forecasts in order to please the analysts (and allegedly your shareholders), the entire dynamic changes. This is not unique to Nationwide but a fact that affects all publically held corporations. Decisions and directions that would be best for the long term give way to short term results and meeting quarterly earnings estimates.

When your pressure is to meet quarterly earnings goals and you are a manager of a business unit, you seem to have only two elements: revenue and expenses. It is difficult for a manager to control revenue. It is probably impossible for a manager to control revenue on a quarterly basis and short term is all that matters. However, a manager can control expenses. Also, expenses can be readily determined and ascertained. I strongly believe that a business really survives on the 'intangibles' like relationships and service (actually delivering service and not merely saying you do), but, these can't be measured by CPA's and thus they get short shrift and only things that can be readily measured and quantified get attention.

The service that PPA's offer to clients is not measurable or quantifiable. However, the expenses associated with maintaining a PPA can be measured and quantified. Terminating the PPAs affected by this move is a cost cutting move that can show quick results - albeit likely at the expense of longer range benefits. Public held firms don't operate on a long range basis and that is just the current reality.

The other factor that could be playing into this decision is, as other commentors have alluded, Nationwide's ability to control the 'favored' PPAs. Often cited as one of Nationwide's strengths is its distribution network. However, this is also an area easy to attack. Most of the distribution is through the broker/dealer channel and let's face it brokers (as well as some PPAs if they were honest) churn business in order to generate commissions. Other annuity issuers and brokerage firms even offer incentives for transfers of assets to their products. I would not be surprised to see a report that tied a spike in transfers to other annuities when the surrender charge of the current annuity expires. Yes there are grounds to otherwise justify a transfer (such as the fees in an old annuity being higher than in a current offering), but, let's face it, the commission incentive is the primary driving force. If Nationwide can control one of the aspects of the case, i.e., the administration of the plans using their pension contracts, it reduces the ease in which the assets can be transferred to a competitors product. Also, you can bet that the administrative overrides that the 'favored' PPAs may initially receive will be reduced as one of the next expense cutting measures. (Note: The ability to perhaps control the plan administration aspect still leaves the problem of the broker initiating the change to move the assets to a competitors product. I can only speculate that in reaction the favored PPA's will not be cooperative when it comes to transfering the plan admin. records thus adding a roadblock into the equation.)

I agree with some of the comments by those who state that the relationship with the plan sponsor is with the PPA. I am not suggesting churning of assets but perhaps there is an opportunity to align with other funding providers. As many of you probably know, Nationwide used the expense credit to cover surrender charges from other carriers when the assets were transferring to Nationwide. I imagine other carriers would be willing to utilize this same tactic to get assets from Nationwide. BUT - please do what is in the best interests of the plan participants even if it is a short term loss to you. Obviously the cost of the expense credit is picked up in contract charges. Don't expose the participants to higher charges to cover the expense credit than they may be already be incurring in the Nationwide contract (although it shouldn't be too hard to beat the pricing since Nationwide certainly isn't the cheapest). Perhaps there's an opportunity to discuss low cost funds with the plan sponsor agreeing to pay more of the administrative costs directly (by showing that the difference in a 1.3% annual charge in an annuity and a 40 basis point fund expense/management fee can be several thousands of dollars). Also, for those in the Nationwide fixed contract, don't over look the potential market value adjustment if the contract is surrendered. For you actuaries, you might want to double check the calculation and, by law, a contractholder has the right to request the formula used to calculate the adjustment. Check the fixed annuity contract for the applicable provision). Even if the plan sponsor decides to charge costs against plan assets, the equivalent basis point cost could be far lower in some cases. There is opportunity here -let's take advantage but keep in mind the best interest of the participants - please.

One personal indulgence (if the moderator doesn't object). I was with Nationwide when the new 'brand' was the big rage. I consider myself a reasonably intelligent person but I just don't get the 'frame' logo and the 'brand' strategy. Perhaps the old "N and Eagle" logo needed some updating but the 'frame' just struck me as stupid from the start. I haven't met anyone who thinks it is anything but dumb (even people who are in marketing in one sort or another basically laughed as their first reaction). I'd appreciate hearing from someone who likes the frame and the 'brand strategy' who might be able to enlighten me. I just don't get it.

While I personally believe that Nationwide's move will be harmful to them (and unfortunately many of the good people who work for Nationwide will end up suffering too), I can understand the thinking that is driving the decision. I believe that the process is simply the reality of having to focus on short term results that can be easily measured and quantified to the bottom line because of the pressures to meet Wall Street analysts expectations. Analyst's won't buy 'we are investing now and our earnings will be lower but in the long run (even a year down the road) we will be a stonger company.' You have to issue your quarterly and annual earnings estimates and if you don't meet them there will be '*&$%' to pay. Nationwide, like all publically held financial 'services' firms, have to satisfy a variety of constiuencies: brokers (who bring in the sales), analysts (who control the buy/sell recommendations affecting the share price), shareholders and those who actually have purchased one of their products. When push comes to shove, guess whose interests are likely served above those who have actually purchased their products? But, in my opinion, until the directors and/or management can be convinced that a particular decision impacts shareholder value and/or brokers won't deal with Nationwide (thus affecting their primary distribution channel), the focus will not likely change.

If you were a manager at Nationwide and your job was on the line, what would you do? I don't think the mid and low level managers like this decision and they are stuck with dealing with the fallout of these decisions. They have mortgages and educations to pay for and likely are feeling trapped and don't have an option to simply go elsewhere. The top management will walk away with their millions of dollars in severance pay so they won't have to worry about suffering financially if they mess up. Also, as long as executive comp. is tied to strict financial performance on a short term basis, I don't think there is any incentive by top management to change management philosopies. If I were in top management and my million dollar bonus was on the line, I'd be tempted to take some short cuts that would make this years financial results meet the goals so I could get my bonus. Again, not saying that I agree with the direction, however, if you put yourself in the shoes of those managers who are forced to deal with this situation and how top management is compensated, it is not surprising to see the actions that are taken.

Lastly, Nationwide is simply participating in the 'race to the bottom' with its competitors. One commentor noted Great West is pretty bad (which I agree). When your competition is Great West (and other major insurers), it's not hard to conclude that your service is in line with competitors (all bad, but service is the same).

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To add to your woes regarding what I surmise is a royal screwing from Nationwide, one of the considerations you should be aware of is how you handle a client asset transfer to or from Nationwide could easily make you a fiduciary, thereby running into ERISA which forbids you from receiving commissions or allowances. Many of you wrote describing, essentially, that the clients followed your recommendation and furthermore stated or clearly implied that your recommendation was the primary basis for the decision to select Nationwide (or its substitute). These types of comments and actions, if proved, can make you cannon fodder for the DOL.

If my surmise is correct, be aware that in most deemed fiduciary cases, the federal courts are looking at the entire relationship between the TPA and the client and, most times, determine that the TPA is a fiduciary. There are federal cases where the agent received the commission directly and he/she owned the TPA firm which did not receive any commission. The courts looked at the "package" to determine that the agent and the TPA firm were both fiduciaries. While I use the word "commission', I include expense allowances and marketing allowances, which are really commisions by another name. If you are deemed a fiduciary in a breech situation, all the commissions earned will have to be disgorged (and, in addition, you will pay the ERISA 20% 502 l penalty).

So, as you go through the trials and tribulations foisted upon you by Nationwide, remember that your conduct when presenting investments and your influence over the plan sponsor could easily result in you being deemed a fiduciary. You must always make sure the client knows that you are acting in the capacity of a commissioned salesperson when you are dealing with assets. And I suspect that, sooner rather than later, a TPA who was terminated by Nationwide will find itself named a co-fiduciary because of subsequent actions and then the agent and/or TPA firm will discover (actually the lawyer will discover) that he/she is a fiduciary. A good lawyer will name you in the suit and let you bear the burden of proving you had nothing to do with the claimed breech. As your lawyers will tell you, the discovery process most often turns up unpleasant things for someone.

My question for your lawyers to answer is who does the contractholder client belong to? If you continue to be the TPA on these clients and Nationwide doesn't provide you with the information you need to complete the 5500, its schedules and the related compliance notices, it seems to me that Nationwide could be in trouble with the DOL. But that comes back to the question of whose client is it? Our firm does not sell anything, nor do we recieve any type of commission or allowance. As a result, many insurance compnaies won't cooperate to get us the needed info timely. I have had great success notifying the insurance companies' legal departments with a letter from the client stating the I am the TPA and all appropriate records and correspondence must be timely delivered to my firm or we will hold the insurance company responsible for any penalties caused by their lack of cooperation. These companies are parties-in-interest (at a minimum) and their lawyers know the rules and which games they can play safely.

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  • 4 weeks later...
Guest consultant

Bill,

Point well taken and it is something all TPA's should consider. Nationwide TPA's either sold direct, through brokers or both, either situation presents a fiduciary liability issue. By direct selling or through a broker, Nationwide TPA's are being compensated by Nationwide for sells and services, either by commission payments or "overrides" which fall under the same category as revenue sharing, marketing expenses, allowances etc. are not considered commissions but are fees for service which are not disclosed to the plan sponsor or participants, although they are paying for it. Apparently Nationwide has come to the conclusion that this is a potential legal issue and have started disclosing this "fee" as a commission on their Schedule A's this year which creates the problem of disgorging profits.

Most Nationwide contract holders who purchased a plan via a broker are not aware that the TPA is being compensated via these "overrides" as well as a direct-billed admin fee. Many are not aware that Nationwide charges an accounting fee ($300 plus $4 - $16 per part.) since many TPA's choose to have this item deducted from participant accounts without the knowledge of the client or participants. All TPA's should consider whether or not the total payments by the client, including "overrides" etc. are excessive. Look at your fee schedule to determine your normal fees, and then determine your "overrides" and commission.

As for being named at least a co-fiduciary for a plan, I would have to say yes. It only takes discretion and as a Nationwide TPA, you have far more discretion than you do with other providers, which is what Nationwide wanted from the beginning. They want someone else to be liable for their actions rather than themselves. Their new “disclosure agreement” places most of this liability directly on the shoulders of the PPA and/or broker. Most PPA's have sold the product, provide investment advice, processed deferrals, loans, hardships, payouts, statements, enrollments etc. and have been paid by the client and received commission dollars, overrides etc. in some form. Something as simple as going in and manually processing an exchange for a participant gives you discretion. Since many of the Nationwide contracts are Group Variable Annuity's, they do not require a securities license therefore do not qualify as an exempt party under ERISA from fiduciary liability.

This is definitely something to think about and consider. I would strongly recommend that anyone in this situation seek legal advice from an attorney who has ERISA experience to determine if they have liability exposure

My two cents.

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