Resigning on non-responsive clients

[Guest JHeller]

I wasn't sure where to post this, but we are a small company and have had a handful of problem clients and have not received any info for a couple of plan years.

Is there a proper procedure to follow when deciding to resign with those clients? What should be or needs to be sent in order to begin the process of getting rid of these problem clients?

[Jim Norman]

What does your service agreement or engagement letter say about terminating the agreement. You should follow that.

We tell 'em they can no longer rely on our document advisory letter, when our services stop, that they should engage another firm to assist them asap and there are substantial IRS and/or DOL penalties for failure to properly operate and maintain the plan. Also tell them our fees for obtaining copies of documents from their files and our file retention policy.

We don't wait a "couple of plan years".

[Guest JHeller]

What if the service agreement doesnt specifically touch on this?

[Jim Norman]

Well, any agreement worth the paper it's printed on typically says something like "this agreement may be terminated by either party by written notice XXX days...." or such.

But even if it doesn't, presumably the former client has breached the agreement by not providing required data (or paying you?). So your firing them is nothing more than acknowledging what is already reality. Just tell 'em since you haven't heard from them or received any of the info necessary to administer their plan, you're done.