Our industry has certainly done some dumb things in its time. I think one of the dumbest is to adopt a moniker that is a completely wrong description of who we are and what we do, and is actually demeaning on top of that: “third party administrator.”
I am not a third party anything! Could you imagine calling your own trusted accountant or attorney a “third party accountant” or “third party attorney”? Why does our industry refer to our critically important role serving clients as a “third party”? We are first party administrators — our clients are our clients, not someone else’s!
Where did the TPA moniker come from? From the health insurance industry, where they really do have third party administrators. There, the party of the first part (the employer) enters into a contract with the party of the second part (the insurance company). An outside entity (the third party administrator) actually administers the contract on behalf of the first two parties. (If this description remind you of something, check out this classic Marx Brothers routine from A Night at the Opera.)
Somehow, someone in our industry decided that we are also third party entities, despite the fact that we are not actually a third party to anything — our relationship is between the client and ourselves, on behalf of the plan. If anything, it’s the plan that’s the third party, not us.
So what are we? We are the employer’s service provider. “Retirement plan consulting firm” works just as well. But “third party administrator”? No; never!
I’ve been railing against this misnomer for many years now, and I know it’s a quixotic cause. (I have been known to tilt at windmills on many an occasion.) What I’d like to see is a movement develop — a movement like the one Arlo Guthrie suggested at the end of his classic 1967 tune “Alice’s Restaurant Masacree.”
To paraphrase the lyrics I’m referring to: If we can get just one, two, three “TPAs” to walk into their clients and say, “I’m a Service Provider” and walk out, they may think it’s an organization. And can you imagine 50 people a day, I say 50 people a day, walking in and saying, “I’m a Service Provider” and walking out? Friends, they may think it’s a movement.
And that’s what it is: the Larry Starr “I’m a Service Provider” Movement. And all you got to do to join is sing it the next time it comes around on the guitar.
And with luck, we will acquire our true titles and the respect that goes along with it! (Sure we will…) What do you think? Use the comment box below.
Larry Starr is the president/owner of Qualified Plan Consultants, Inc. in Springfield, Mass. He is the recipient of the 2012 Eidson Award and the 2004 Educator Award, and formerly served on ASPPA’s Board of Directors.
I am not a third party anything! Could you imagine calling your own trusted accountant or attorney a “third party accountant” or “third party attorney”? Why does our industry refer to our critically important role serving clients as a “third party”? We are first party administrators — our clients are our clients, not someone else’s!
Where did the TPA moniker come from? From the health insurance industry, where they really do have third party administrators. There, the party of the first part (the employer) enters into a contract with the party of the second part (the insurance company). An outside entity (the third party administrator) actually administers the contract on behalf of the first two parties. (If this description remind you of something, check out this classic Marx Brothers routine from A Night at the Opera.)
Somehow, someone in our industry decided that we are also third party entities, despite the fact that we are not actually a third party to anything — our relationship is between the client and ourselves, on behalf of the plan. If anything, it’s the plan that’s the third party, not us.
So what are we? We are the employer’s service provider. “Retirement plan consulting firm” works just as well. But “third party administrator”? No; never!
I’ve been railing against this misnomer for many years now, and I know it’s a quixotic cause. (I have been known to tilt at windmills on many an occasion.) What I’d like to see is a movement develop — a movement like the one Arlo Guthrie suggested at the end of his classic 1967 tune “Alice’s Restaurant Masacree.”
To paraphrase the lyrics I’m referring to: If we can get just one, two, three “TPAs” to walk into their clients and say, “I’m a Service Provider” and walk out, they may think it’s an organization. And can you imagine 50 people a day, I say 50 people a day, walking in and saying, “I’m a Service Provider” and walking out? Friends, they may think it’s a movement.
And that’s what it is: the Larry Starr “I’m a Service Provider” Movement. And all you got to do to join is sing it the next time it comes around on the guitar.
And with luck, we will acquire our true titles and the respect that goes along with it! (Sure we will…) What do you think? Use the comment box below.
Larry Starr is the president/owner of Qualified Plan Consultants, Inc. in Springfield, Mass. He is the recipient of the 2012 Eidson Award and the 2004 Educator Award, and formerly served on ASPPA’s Board of Directors.
- Log in to post comments