Nipa News: Understanding the Unique Value of TPAs

NIPA News Video: Understanding the Unique Value of TPAs. TPAs offer a unique and independent voice helping retirement plan sponsors find solutions to every day and sometimes challenging problems. Yet because most of the time they are referred by record keepers and advisors, their value can be muted.

This unique video provides insight from NIPA president Joe Burt, also president of Portland-based Pension Plan Specialists, into what TPAs do and how plan sponsors can best leverage them, the goal of the monthly 401kTV NIPA monthly newsletter overall.

Full Transcript Below:

Fred Barstein:               This is Fred Barstein with 401KTV here in Las Vegas at the NIPA Annual Conference. I’m here with the esteemed President of NIPA, Joe Burt, and Joe is the President of Pension Plan Specialists based out of the Portland area?

Joe Burt:                      That’s right.

Fred Barstein:               3,000 clients and been in business for 20 years. He also does executive coaching and works with small firms like the GAO Congress. So, we wanted to ask him a couple of questions. Okay if we ask you a few questions today?

Joe Burt:                      Absolutely.

Fred Barstein:               So, the first question, and really we wanted to cover these, you were really the one who came to 401KTV to create this private label for NIPA, which is an association of TPAs. Why’d you do it?

Joe Burt:                      It’s a great question, and one of the things that we’ve tried to do as a board was we really wanted to figure out how we could take our value as third-party administrators as an industry and try to bring those solutions, those ideas and that value that we have to the plan sponsors or the end users, the ones that we work with the most.

Fred Barstein:               Right. But you do that already, right?

Joe Burt:                      That’s true. Yeah, we do. We do it already. But, the difference here is that we work … we mostly work with recordkeepers or advisors, our vendor partners.

Fred Barstein:               Those are your partners, they bring you in.

Joe Burt:                      That’s right, yeah. So, they’re the referral sources for the most part. And oftentimes, what we find is that they’ve brought us to a situation that they deemed to see our value and they deemed that were important for us to be a part of. What we wanted to do was we wanted to help the general public to understand who we are as third-party administrators, and understand our value in a way that maybe isn’t always articulated through an advisor or a recordkeeper.

Fred Barstein:               Well, now you can. So, what is the value that you wanna articulate?

Joe Burt:                      So, our value is that we, as third-party administrators, we have a unique perspective. We’re a set of independent eyes that overlook the plan compliance, the administration, the testing. But more so we have ideas and concepts and solutions that don’t always get thought of. Oftentimes, we find plan sponsors who are struggling with a certain provision within their plan and they struggle to find somebody who can step up and say, “Hey, here’s what you need to do to fix it.” And that’s what third-party administrators do every day.

Fred Barstein:               You mean plan sponsors aren’t specialists in ERISA?

Joe Burt:                      Not most of them, no.

Fred Barstein:               And why should they be?

Joe Burt:                      You’re right. It’s something that they don’t do every day and it’s a stress for them oftentimes, and it’s one that we can relieve from them.

Fred Barstein:               So, you wanna make sure they understand the role and leverage [inaudible 00:02:38] ’cause not all plan sponsors leverage.

Joe Burt:                      No, they don’t. It’s interesting we have to …

Fred Barstein:               They pay for them.

Joe Burt:                      Yeah, that’s right, and oftentimes we have to go out and we have to say to our clients, “Hey, let us help you with that. Let us take that off your plate. Let us address those questions for you.”

Fred Barstein:               So, this is a way to communicate, to let them know how they can do it.

Joe Burt:                      That’s right.

Fred Barstein:               Not necessarily just for their partners but directly.

Joe Burt:                      That’s right.

Fred Barstein:               Well, that’s good … and hopefully we communicated a little bit today.

Joe Burt:                      I hope so.

Fred Barstein:               And we’ll continue to do that over the months as we continue this relationship.

Joe Burt:                      We certainly shall.

Fred Barstein:               Very good, thank you, Joe.

Joe Burt:                      Thank you.

Fred Barstein:               And thank you for watching 401KTV. Stay tuned.

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