Jump to content

TPA/Recordkeeper Staffing Structures


Recommended Posts

I would be most appreciative if anyone is willing to share some information with me. I am aware of two main staffing structures for TPA firms:

  1. One or more employees are assigned to a block of plans. They handle everything for that plan soup-to-nuts. This is the “Relationship Manager” approach.
  2. Segregated departments (i.e., conversions, compliance, distributions, etc.).

I believe the former is more prevalent for TPA-only businesses, though I know some TPAs that use the second method. I am more interested in the small to mid-size TPAs that also handle internal daily recordkeeping (say on the Relius, SRT, or Datair daily platform). What structure are you using - or is it a combination of the above? If I am a new client starting or moving my plan, and you will be handling TPA and recordkeeping, who am I dealing with for implementation and ongoing communications over the entire year?

I appreciate any help you can provide.

ERPA, QPA, QKA

Link to comment
Share on other sites

Your best bet is to contact an actual TPA to discuss as they all have some differences, however minor. Our TPA functions as item 2 in your example with one person assigned a block of plans (under 100). We use Relius but the investment houses we work with are responsible for recordkeeping. 

4 out of 3 people struggle with math

Link to comment
Share on other sites

We are soup to nuts, with a few exceptions: 

  • If there is a plan termination or a client has a sizable force-out project, we have an assistant in the office who manages those larger distribution projects.
  • We also have a part-timer who handles the reconciliation of plans who use individual brokerage arrangements.
  • The only item that would be truly "departmental" is our Document Group, who prepares plan documents and amendments.  Consultants request and review the documents/amendments before they go out for signature though.
  • We have a Support Group who handles communications with clients when their 5500s are ready for filing.  They tend to spend a lot of time on the phone this time of year working with clients who have forgotten their passwords.  They also managed the communication of the new login requirements for electronic 5500 filings.

In our office, our CEO works directly with new or takeover plans, preparing projections and putting together plan design with few exceptions.  Once this piece is complete, the plan is assigned to a consultant, and it's their baby from there.  Any changes in plan design down the road are within the consultant's purview - providing clear instructions to the document department for applicable amendments.

This works well for us, and our clients appreciate having a single point of contact for just about everything.  If a relationship doesn't work out - and this rarely happens - a client might be assigned to another consultant in the office.

 

Link to comment
Share on other sites

Prior to selling my small TPA firm, around 450 plans, we compartmentalized plan documents / amendments and distributions / loans.  Other than that, the administrators handled everything else, asset and census reconciliation, contribution calculations, 5500 filings and client calls.  Much like Towanda's firm, I worked sales, takeovers, handled the problems and did much of the research.

We did in-house daily valuations with FDP (yes back that far) and subsequently the ASC system.  When ASC decided to get out of the daily valuation software business, so did I.  It became too time consuming, a huge liability, cyber security, and having to have someone available daily to process transactions in a small shop became too demanding.

I found it to be more profitable to utilize the recordkeepers, who have the resources to provide and maintain the recordkeeping system, internet, security, marketing materials and notices, that all run through their legal departments.  I struggled to copy and paste forms together that were all client specific.

I don't want to sound negative, that was just my experience, and after 20 years I became burnt-out running my own shop.

Link to comment
Share on other sites

The smaller the TPA, the more common it will be for each person to have A-Z responsibilities.  

As employee count and plan count grows, the more common it will be to segregate departments.

Unless you are a boutique or "white glove" type of firm, I think you have to segregate department to achieve any kind of scale.

 

 

Link to comment
Share on other sites

We work compartmentalized with separate departments for Sales/Marketing, Compliance, Conversions, Distributions, Participant Call Center, and Plan Sponsor/Advisor Daily RK support (i.e., help with payroll uploads and other questions).

So, for those in similar situations, I don't see where a Relationship Manager even fits in. For the Plan Sponsor:

- Conversions would handle onboarding

- Testing, Documents, and 5500 interactions would be handled by Compliance

- Ongoing questions would be handled by Support

- Distributions would handle distribution-related matters

The Sponsor/Advisor could be dealing with 4 different people after onboarding, though the positive is that they are getting a pro in each department instead of a jack-of-all-trades master of none. Furthermore, if one person is out (or separates from the company), there is no scramble to reassign the work.

 

Any further thoughts? Thanks.

ERPA, QPA, QKA

Link to comment
Share on other sites

17 hours ago, Gadgetfreak said:

So, for those in similar situations, I don't see where a Relationship Manager even fits in. For the Plan Sponsor:

- Conversions would handle onboarding

- Testing, Documents, and 5500 interactions would be handled by Compliance

- Ongoing questions would be handled by Support

- Distributions would handle distribution-related matters

The Sponsor/Advisor could be dealing with 4 different people after onboarding, though the positive is that they are getting a pro in each department instead of a jack-of-all-trades master of none. Furthermore, if one person is out (or separates from the company), there is no scramble to reassign the work.

 

Any further thoughts? Thanks.

Everything runs through the RM, and they communicate with the internal departments like compliance, distributions, etc..  That makes them the single point of contact for the client.

 

 

Link to comment
Share on other sites

I think it depends on company circumstances. 

Average plan size and type of plans...

how much tech do you utilize? Is everything done manually or can annual emails be sent as a batch, etc?

these things all factor in.

The more manual work is needed by the RM, the fewer plans they can handle.  150-200 should be doable though, and the number increases as you offload time consuming work.

 

 

 

 

Link to comment
Share on other sites

Ah, then I am not understanding the role of the RM in your situation. I figured that back-office teams would send out/post notices and job of the RM was just to speak to the client about design, testing results, reminders to submit the 5500, payroll upload/website questions, etc.

ERPA, QPA, QKA

Link to comment
Share on other sites

2 hours ago, Gadgetfreak said:

Ah, then I am not understanding the role of the RM in your situation. I figured that back-office teams would send out/post notices and job of the RM was just to speak to the client about design, testing results, reminders to submit the 5500, payroll upload/website questions, etc.

In my example, the RM would receive everything from the back office departments and communicate it to the client.  So while all departments have a hand in things throughout the year, the client only works with the RM.  Almost as if the RM did A-Z.  

There are going to pros and cons with every approach, but I think you get more bang for your buck by compartmentalizing your employees. You just don't need a someone making $80k processing distributions 10 hours a week when you can have a cheaper first year employee doing it...

 

 

Link to comment
Share on other sites

Gadgetfreak, a path to finding out what works best for your company is to discuss what you want your business to be known for in the market place.  Classically, the characteristics of the business involve assessing some of the E's such as expertise, experience, effectiveness and efficiency.  Here is how this may apply to a TPA.

Expertise is characterized by in depth knowledge of benefits and tax laws, regulations, plan design, and specialty knowledge such as a focus topics such as M&A, related employers, for profit companies, not for profits, governmental plans... 

Experience is characterized by how long you having been operating in your market segment, how many clients you have with similar plan provisions or plan size, and the accumulated knowledge of topics and issues at the boundaries of your market segment. 

Effectiveness is characterized by doing the right things.  Do you consider how a service you provide adds value to your client base, or do you find you add services just because a competitor is doing it?

Efficiency is characterized by delivering your services optimizing your utilization of staff and technology to be fully engaged and providing responsive, accurate and timely services.

You will find within most TPAs work is performed or assigned based what is needed to deliver the service to the firm's client base.  If you want to be efficient where you have a large volume of routine transactions, then you will want to have specialty groups that focus on transaction processing.  If there is enough volume of a particular transaction type such as distributions or contributions to keep staff fully employed, then organize them around those transaction types.  If there is not enough volume, then the staff will need to be able to handle two or more different transaction types.

A lot of firms will start a new employee in one area, say processing payrolls, and then put the employee on a rotation every 6 months or so to a team processing a different type of transaction type.  The end result is a well-rounded, experienced staff member.

The experienced staff member can act as a mentor to the new staff, but also is in a position to help respond to the unusual transactions that arise.  This is the level where a transaction is not business as usual and requires the benefit of an experienced staff to address or fix it.

If something is truly messed up, it is time to involve those who have the expertise to understand the issues and implications to the plan, and to guide both the business and the client in solving the problem.

Scale is an important factor in this assessment.  How many staff do you have or can afford to have?  Fewer staff means you need more experienced staff.

Your desired reputation in the market place also will contribute to your assessment.  If you want to be the lowest-cost provider, then make sure your client base knows that you are a no-frills provider to manage their expectations.  If you want to be the innovating or problem-solving go to company, you will need to have staff with the expertise and experience to meet the demands of your clients.

I realize that this all sounds a bit too much like Harvard Business School, pie-in-the-sky comments, but if you give it an honest chance to guide your internal conversations you will find that your own organization will help define your business structure.

Good luck!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...