Client property or TPA property

[thepensionmaven]

I have released a client from my servicing contract and he is asking me to return my files.

I know this has come up before, my files consist of paperwork the client has submitted to me (W-2s, K-1, etc),  my calculations, my copies of the investment reports I access online.

Aside from the client having all this information already, is there any basis for me to send him my file or is this just "sour grapes"?

 

[david rigby]

IMHO, these are your files. However, it may be prudent to send PDF copies anyway, stating that you are doing so for the client’s convenience, and are retaining your files.

But, check your service agreement first.

[Peter Gulia]

Beyond checking your service agreement, consider also:

If you are a practitioner before the Internal Revenue Service:

31 C.F.R. § 10.28 Return of client’s records https://www.ecfr.gov/current/title-31/subtitle-A/part-10/subpart-B/section-10.28.

If you are a member of the American Retirement Association or one of its “affiliate organizations”:

“When a Principal has given consent for a new or additional professional to consult with a Member with respect to a matter for which the Member is providing or has provided Professional Services, the Member shall cooperate in assembling and transmitting pertinent data and documents, subject to receiving reasonable compensation for the work required to do so. In accordance with Circular 230, the Member shall promptly, at the request of the Principal, return any and all records of the Principal that are necessary for the Principal to comply with federal tax Law, even if the Member is not subject to Circular 230. The existence of a fee dispute generally does not relieve the Member of this responsibility except to the extent permitted by applicable state Law. The Member need not provide any items of a proprietary nature or work product for which the Member has not been compensated.

ARA Code of Conduct rule 8.B https://www.usaretirement.org/code-conduct

Even when applying rules of this kind, many practitioners distinguish between records and a professional’s work product.

And even about records, one might distinguish between original records and copies. In another BenefitsLink discussion, Larry Starr suggests deliberately not possessing the original of a client’s record. (One might lack a duty or obligation to make copies of copies of records already in a client’s possession.) And as Larry observed in 2020’s discussion, a prospect of incurring fees might motivate a former client to become less lazy about looking for what it already has.

https://benefitslink.com/boards/index.php?/topic/65925-circular-230-ethics/

Would you like a retaining lien so you need not deliver work your client hasn’t paid for?

Would you like a copying fee? An assembly fee? A delivery fee?

What’s in your service agreement?

Now that March 15 season is over, is it time for some spring cleaning?

[Pam Shoup]

I would include a section in your service agreement about what you will produce after a contract termination and if there is a fee to produce it.  Since we are also a RK, there is a lot of information for us to provide for that purpose.  For the compliance part, we include the 2 most recent 5500s/8955SSAs/5558s (if applicable), Basic Plan Document, Adoption Agreement, Trust, SPD, any amendments, etc., a copy of the most recently completed plan tests and a vesting report for the most recently completed year.  If they want more data than that, then the cost is xxx/hour to produce wtih a minimum fee of one hour.  I very rarely get asked for more than that for compliance and it hands off the data for the new provider to start for the next plan year.  It also sets the expectations early.