Employee staffing structure

[ESI2015]

How are your firms structuring your staffing roles?  Are you operating with administrators that correspond with their assigned clients and also perform all of the annual valuation work from census scrubbing, to contribution calculations, applicable testing and tax return filings?  Or are you structuring your organization with staff assigned solely to client communication and others to day-to-day plan administration functions only?   Do you operate with staff that only perform distribution and loan processing functions? What seems to be working best in your organization from a client happiness and overall efficiency process?   And if you wouldn't mind sharing the size of your organization or what you have found has or hasn't worked if you have looked into making changes to your overall practice staffing structure.

[NJ Mike]

We are a small firm, 7 employees (3 pension administrators, 3 support staff and 1 owner).  Basically, each administrator does everything on their cases.  Support staff doe prepare and follow up on census data, prepares 1099's and does payroll processing of deposits.  We are not large enough to allocate staff to one or two particular items.  Years ago during one of the document restatement periods (another company), the head of my "team" split us up and had 2 people doing valuations, 2 doing documents and 2 doing plan terms and benefits.  It did work well mainly because the two weakest individuals were assigned the benefits and plan term work.  I don't like that approach and what we are doing works well for us.

Mike 

[Mr Bagwell]

I have work experience for two types of setups.  Both would be categorized as small firms with the second firm being especially small, 3 employees.  Both would be considered a bundled plan approach.

Firm one was based on separate roles.  The administrator was more relationship and handled the plan issues with the clients.  The recordkeeper then handled the contributions, distributions, and testing, etc for any and all clients.   Recordkeeper did not call the clients.  There was a dedicated 5500 preparer.  1099's were handled in house via a trust system.  Dedicated employee for onloading and off loading.

Firm two was "all hands on deck" but still split roles.  The head of the firm handled the high level relationships, plan design, plan documents, and 5500 preparation and some of the ongoing Relius upkeep.  I then handled the detail work of contributions, distributions, some of the Relius work like making sure files traded, pricing uploaded and compliance testing.  We handled all plans together.   I also had the flexibility to call the clients for census inquiries and the like.   A third person was eventually hired to do contributions, some of the distributions and help with valuations.  We split the plan list into you handle these easier plans and I'll take the more intricate plans.  There was a dedicated staff to sell, but that was done by the brokers and RIA's, not by us.  Although we would occasionally get the cold call asking about our retirement services.

Here is my philosophy.  I don't care what approach is taken because both can be successful.  I see and have seen that communication(s) between all the parties is the key to client happiness and efficiency.  Of course, a solid staff of people make this happen.  I like the approach of employee A does all or most of the work for his set of plans.  I think it helps the plan and provider with efficiency because ideally knowing the plan and who is eligible makes for a smoother plan.  Conversely, I like the idea of employees that do contributions and distributions exclusively because some employees like the repetition and they will sit there and do good work after good work. 

Depending on the staff at the time, you may find switching between plans approach and specific work approach will be the magic ticket.  Other times, maybe not.

My soap box issue is this: if you can't do contributions, distributions and testing.  Don't bother, get out of the business. Everything else just gets more complicated.

Hope this helps.

[dmwe]

I work in a Bank Trust Dept that provides bundled services. We have 250 Plans and 28,000 participants on the Relius platform. We have relationship managers that act as quarterback, and our client services staff is somewhat segregated into teams that process contributions and trades, a distribution team, testing team, special projects person, phone support and an Education team. There is cross training for the folks who do the daily processing so someone can step in to help when required. It works very well.

[Belgarath]

For smaller firms, I prefer the "one-person handles it all" approach, with some modifications if staffing allows - an IT person, perhaps, or a document/compliance person, etc.

There's a certain comfort level in this, particularly in a small firm that has to run lean, in that when "something" happens (and it always does - sickness, disability, someone quits, gets fired, caring for aged parent, whatever) it is much easier for remaining folks to temporarily pick up the slack. If everything is compartmentalized, it is much more difficult for someone else to step in, as a general rule.

But as Mr. Bagwell notes, either approach can (and does) work.

[Tom Poje]

and then there are misfits like me...

one of the in-house reports I created includes a random message from the cow that everyone looks for whatever reason.

by the way, this is a modified Relius SOA report to make it easier to fill out the 5500. (of course if there are adjustments - such as ADP refunds) the numbers have to be moved, but the purpose was so just about anyone can in the office could use it)we work in different locations, so I don't get to see the folks so I think stuff like this helps.  but then I also take the trouble (at my own expense) to send out 'gifts'  e.g. they all get an annual gift box from Baraboo just because it is neat to get some cow pies. it started as a one time joke, but never stopped. at one time everyone worked in the same office so I used to give out homemade Christmas cookies and breads, but I know I'm lucky to work with some fantastic people.

[RatherBeGolfing]

I am now a little sad because I don't get random cow messages...

[Doghouse]

One of the challenges our industry struggles with is that of bringing new people into the industry. The last few places I've worked have had distribution and trust accounting specialists, but everything else, including relationship management, was handled by the administrator. Distribution processing and trust accounting were always good entry level positions and hey, if you can't handle trust accounting, you might not be cut out for the business at all.

[Tom Poje]

RatherbeGolfing-

but if you aren't using Relius, my report would do you no good.

..................

the whole point of my comment (if it was missed), in addition to assignment roles related to plans, there are a lot of little 'extra' one can do that help make things flow.

and use people's strengths. They don't ask me to talk to clients because they know its not my strength. but compliance questions, or importing particular  data I can save everyone time.

[Belgarath]

11 hours ago, RatherBeGolfing said:

I am now a little sad because I don't get random cow messages...

You should be grateful. We had cows when I was growing up, and although they are stupid, they do possess a low peasant cunning when it comes to getting out of the fences and terrorizing the local countryside.

At one time, there was a theory that the wrinkles on the brain equated to intelligence - the more wrinkles, the more intelligence. We had a neighbor who lived up the road a few miles, and he stopped by one day when I was working on the fence with my Dad, and after observing a cow doing something ridiculous, he said, "There ain't NUTHIN as stupid as a cow. Brain as big as a washtub, and not a gawd damned wrinkle on it!"

Tom, I saw (really) some stationary made of sheep excrement. If I see it again, I'll try to remember to send you some...

[MoJo]

44 minutes ago, Belgarath said:

Tom, I saw (really) some stationary made of sheep excrement. If I see it again, I'll try to remember to send you some...

I think many of my colleagues must be using something like this - as a lot of what my team sees is rather "aromatic."  As far as random cow messages go - the only one's we get are steaming and invariably someone has stepped in it.

(sorry, couldn't resist)

As far as staffing models go, my experience with TPAs is that it is really size dependent.  Small goes with one person handling most, if not all of the client's needs (including distributions).  I worked for a rather large TPA once (about 80 employees) and it was a "hybrid" approach.  There were contribution processors, distributions processors, a conversion team (rather newly implemented - about 5 or 6 years ago), a "technical" team that were SMEs and document specialists (also newly created when conversions were split off), and administrators - who did everything else (including testing and Form 5500 work).

[ESOP Guy]

I have worked in this industry in some form since the early '90s.  In all the TPAs and one bank the primary way it was there was one person who did almost all the work.  At the bank there was a relationship manager.  In most of the TPA there was some kind of business development function.  But as a rule I was the face of the firm to the client.  My guess it has been that way because of self selection.  I interviewed one at a firm that all functions were specialized and I was going to be the manager of the distribution group.  I did not care for the idea I would not be working on all phases of the plan.

The one observation I will make and maybe others can comment on this also.  The places I know that have a distribution group, contribution group, testing group...... the one thing they had in common was they offered a very narrow set of plan documents.  This was how they kept their costs down.  They might have an A, B and C document.  If you were in the distribution group you could look up the client and see which of the documents they had.  If it was an A document the distribution rules were set and there was a flow chart explaining how they worked.  By doing this you didn't have to get people with college degrees to do a lot of the work.  So the pay was lower for many of the people.  For the distribution group I interviewed to be the manager of the group I was going to be the only 4 year degree person in the group.  You didn't need a bunch of accounting majors to do follow one of 3 flow charts all day. 

I have always worked in the TPA firms that sold themselves as we were willing to give the client pretty much what they wanted if we could agree on a price.  So that takes someone who can read plan documents, who can listen to a client and hear when they are saying the participant statements needed to be changed, or they need the firms website to do something new.... I need to  be as much a problem solver as a processor. 

Both models have their strengths.  The limited options and highly specialized model can get work done at a low cost my current employer will never be able to match.  On the other hand if you want to customize your ESOP benefit program as part of your overall benefit structure the firm I work for now is easily a top tier firm to be working with on that project.  (I will stop selling the company I work for now.) 

[RatherBeGolfing]

1 hour ago, Belgarath said:

You should be grateful. We had cows when I was growing up, and although they are stupid, they do possess a low peasant cunning when it comes to getting out of the fences and terrorizing the local countryside.

 

Ha, but since they are not my cows they are not my problem :)

[Bill Presson]

We're a bit of a mix because we've acquired 6 additional firms in a little over two years. So, every office works somewhat differently. We plan to be a hybrid where an administrator will be responsible for almost everything. They might also have an assigned assistant if their case load is large enough. We have several shared assistants too.

We do plan to carve out onboarding of new clients, trust accounting and an optional distribution dept for employers that elect. We outsource our IT and then have a few other specific people like our CEO, me, our business manager and director of marketing. Most of the former owners (as well as some new hires) are providing client relationship/business development services.

But it's working well now and we know where we're heading. That was the biggest struggle, but is now making things easier.

 

[shERPA]

When you're a small firm you have little choice but to have soup-to-nuts administrators.  As you grow IMO it really makes more sense to consolidate certain services that are peripheral to the ongoing admin cycle.   Functions such as trust accounting, loan and distribution processing, onboarding and plan documents are all tasks that lend themselves to being segregated.   We evolved this way over 25 years.

It is really difficult to find administrators who are experts at everything, and the really good ones are expensive.  Training them to do documents, assemble pdf packages, deal with mundane tasks like withholding is not a good use of their time and about the most expensive way a firm can handle these functions.

Creating separate functions creates a career path for new hires who find they like the business and want to learn more.  As you get bigger it is more and more difficult to find well trained experienced administrators.

Separating functions and creating processes improves the client experience and makes it more predictable regardless of who is handling the plan.  I know firms where some administrators are still using the Datair DOS system and others are using the Win system.  When a firm has multiple clients with an advisor or CPA this creates confusion when they see vastly different reports.

Quality control.  With separate functions the people in the separate departments can be really good at handling TA, loans, distributions or documents.  This makes them faster and more accurate.  Also a firm with separate silos very vulnerable when an administrator leaves, is on vacation, etc.  

Onboarding should absolutely be separated from regular admin in any firm that really wants to grow.  Having a predictable, repeatable and scalable new business process is essential to create trust with referral sources and keep business development people focused on opportunities rather than getting involved in the minutiae of a takeover.  And administrators with caseloads are on a treadmill with deadlines 2x per month and their own clients to whom they've made their own promises and commitments.  Dropping new business on them disrupts them and they often get shuffled to the bottom of the pile.  Renee Connor at PensionPro published a very good article on this a couple months ago.

Just my opinion. 

[TPAJake]

We have a documents team, a team of census collector/testing specialists, a loan & distribution team, and an account management team that reviews all of their admin work.  Sales, automation, IT & implementation are all separate teams.  A second company handles 3(16) fiduciary duties.  The partner team oversees the whole orchestra & keeps us all on track. 

[K2retire]

I have worked in situations where I was expected to do it all and where everything was compartmentalized. I firmly believe that the only way to learn the business and understand why things must be done a certain way is to see all aspects of running a plan. Having teams that only focus on one aspect is more efficient. But being able to work on the entire plan is more interesting and rewarding for the staff.