Ethics of Getting Paid

Have been the EA for about 25 DB plans (mostly stand alone) for a TPA where we billed the TPA after we did the valuation which was a mutual understanding though nothing in writing. For 10 years payments came but early 2024 they stopped and have been sporadic since though valuation work done and forms submitted through 2024 plan year. Last partial payment was in July and outstanding fees are up to $30k, most for 2 plan years. What would be ethical ways to proceed to get paid (assuming will not be doing any further work for this TPA and not suing based on past experience):

a) contact plan sponsors directly regarding the situation,

b) provide names of plans to another TPA with the expectation they would contact the plan sponsors,

c) amend 5500 fililngs for unpaid years (since we have filing authorizations) removing the SB,

d) 1099 the TPA for the $30k,

e) publicly name the TPA (like on this message board) as a warning to others?

Are none, some, or all of these worth a try or are there better options?

I'm an outsider looking in, as I'm not an EA, so I don't know what EA codes of conduct might dictate. Having said that, I don't like any of those options. I assume you have contacted the TPA and discussed the situation with no satisfaction? I'd consider getting a lawyer to write a letter, suggesting that they explore ways to resolve the situation without initiating litigation, etc. - quite often, such a letter produces results. While you are at it, perhaps the lawyer can suggest other non-litigation strategies that won't potentially get you into trouble.

Good luck! I suspect that others on this board can give you better suggestions.

Your description of the facts suggests you might lack a written engagement with a pension plan’s sponsor or administrator, and further might lack a written engagement with the plans’ service provider.

Recognizing those and other complexities, lawyer-up.

About those of the pension plans that are ERISA-governed, consider Standards of performance of actuarial services, 20 C.F.R. § 901.20 https://www.ecfr.gov/current/title-20/section-901.20.

Get your lawyer’s advice about whether the State law that applies to each engagement provides your retaining lien on (i) your certificates and reports not yet paid for, and (ii) those of a client’s records in your possession.

If State law provides you some retaining lien, consider the extent to which Federal law supersedes State law, restraining your rights by a duty to return a client’s records. For example, 20 C.F.R. § 901.20(j)(1). Consider distinctions between a client’s records and the actuary’s work product.

This is not advice to anyone.

BenefitsLink neighbors, what do you think about withdrawing a Schedule SB because it was not paid for?

Beyond law, listen, carefully, to Paul I’s observations about civility and practical sense.

And about an ethics code that results from membership in a voluntary association, here’s one bit:

“. . . . The Actuary shall not refuse to consult or cooperate with the prospective new or additional actuary based upon unresolved compensation issues with the Principal unless such refusal is in accordance with a pre-existing agreement with the Principal. . . . .”

American Academy of Actuaries, Code of Professional Conduct, Precept 10, Annotation 10-5 https://actuary.org/wp-content/uploads/2014/01/code_of_conduct.8_1.pdf.

Yikes drakecohen.  First, I agree with previous responses:

1.  Lawyer up

2.  Get a clear understanding of your professional obligations based on your credentials and memberships.

While getting stiffed sucks (I still refuse to patronize businesses who stiffed me decades ago), you've got a business operation problem.  You allowed this client to be 2 years in arrears.  $30k is some serious money - that would keep me in beer and diesel for 20 years!

I would immediately be sure you have written service agreements in place for ALL engagements.  If long-time clients resist, explain that your E&O carrier requires them.

At the same time, rethink your billing practices - start billing quarterly in advance or at least get 1/2 when the year end census request goes out and spell it out in the service agreement.

As far as your deadbeat client, focus on recovering as much as possible and also prepare to walk away from that block of business.  They left your circle of trust when they stopped paying you.  If you want to try pulling their clients that you serviced , avail yourself of legal advice and don't run afoul of professional ethics/standards.

None of the above will be as emotionally satisfying as the 5 actions you listed.  If you need to drain some venom, visit the shooting range or rent an excavator for the weekend.

I greatly appreciate the feedback but past dealings with post-billing have been overwhelmingly positive especially with small plans with recurring annual work. This particular TPA was a reasonably good payer for 10 years and contacts at the TPA were diligent and compentent. Assuming they had business issues that I eventually picked up on but don't regret doing the work, if only for the experience.

CCA is having an ethics webinar tomorrow where I hope to be able to bring this up.