Editor’s Note: This is Part II of a two-part series. Part I is here.
As I write Part II of my article, it’s Aug. 29, 2020. COVID-19 is not gone, and, in fact, as more states opened up, it began spreading faster. Finally, most, if not all, of us are wearing masks to help reduce the spread. Many third-party administrator (TPA) firms, as well as broker-dealers and recordkeepers, have not returned to their offices and don’t have plans to any time in the near future. Many companies are not even considering it until 2021. Our fund wholesalers and other vendor representatives are still not allowed to travel. In answer to that challenge, many of our partners have begun having weekly video meetings with advisors and TPAs to stay front of mind, as well as to support them. Sometimes (it seems like Wednesdays and Thursdays), I will have four or five webinars in one day. Sometimes, there are three going on at the same time, and I have to choose which one to attend and hope that I will have time later to go back and listen to the recorded webinar that I missed (if I can squeeze it in between the webinars scheduled on the other days). Then you also have to find time for fun. I am learning to play golf.
School is back in session. Most colleges have welcomed students back to campus, although many classes are online. My son is a junior at Texas A&M. He is in the Corps of Cadets and required to live in the Corps dorms. Each brigade lives together in one building, with each unit occupying one floor with communal bathrooms. This week, they had the first confirmed new case of COVID in another brigade/unit. The entire unit is quarantined now for 14 days. On a campus with 65,000 students and in the Corps, where there are 2,500 students living together in tiny rooms, increases in cases were bound to happen. My daughter is in eighth grade and goes to a small school. They reopened completely in person, wearing masks all day. Our larger school districts are completely online or half-and-half. When I go to work in the mornings, I am thankful to have an office that I go to without concern, and even more thankful that my daughter is not homeschooling again. However, I have very good friends around the country who are faced with homeschooling while still trying to work full time and run their companies. I listen to them and offer a shoulder to cry on. I can’t imagine how hard that is, especially when your children are young and need help with their schooling. As schools reopen, we have seen an increase in cases nationwide, as everyone expected we would. We are all hoping that it levels off and school continues.
The IRS finally updated the definition of a qualified individual under the Coronavirus Aid, Relief, and Economic Security (CARES) Act to broaden it to include participant spouses and anyone else who lives in the participant’s home. This allowed us to be able to help more people. It also required that we send out yet another modified safe harbor notice. However, surprisingly enough, we still did not see a huge uptick in participants who were taking money out of their plan. Even more encouraging, according to research reported by the American Retirement Association, many participants did not stop deferring or even reduce their deferrals. It’s encouraging to everyone in the industry that participants are staying the course, even during these difficult times.
As we continue talking to clients, it seems that for the most part, their moods are improving. There seems to be an attitude of hope, as we all become more comfortable with the new way we are all working, although we all wonder how things will be if this continues and when the paycheck protection program (PPP) funds are all spent. We are waiting patiently for one more COVID relief bill to be passed, but it looks less and less likely.
Challenge 5: When Is This Going to End and When Can We See Our Friends Again?
I don’t know about you, but I am a hugger. I am not talking about little hugs. I am a bear hugger. I hug everyone, even my friends and team members who don’t like hugs! They know this about me, and you can see them prepare as I make my move. I learned this from my parents and grandparents. My grandfather would never leave the house even just to go to the garage without kissing my grandmother on the cheek, giving her a big hug and telling her that he loved her.
Before COVID-19, I had never once left my parents’ house or left my siblings and even their spouses and kids without hugging them and telling them I loved them. My kids learned early on that they did not get out of the car or leave the house without giving me a hug and exchanging “I love you’s. ” My middle son was mad at me one morning his senior year in high school and he left the house without hugging me. He quickly got a call from his father informing him of his error. Other boys’ moms used to look at me in wonder when my boys would hug me at the mall or at school in the cafeteria in front of all of their friends and never even think twice about it. Not being able to hug my parents (I still hug my kids regardless of COVID-19) and not being able to go to see other friends from all over the country has been a huge adjustment for me.
In mid-summer, we all figured out there was no way that we were going to have in-person conferences. Many major cities, such as Chicago, are not allowing large gatherings, and, in all honesty, I think many of us aren’t comfortable with the idea of getting together with 1,500 people in an enclosed conference center. I am currently chairing a conference committee, and after we had it planned and we were ready to open registration, we had to pivot and completely plan it again to be virtual. While I believed that registration would be higher because people wouldn’t have to travel, I was wrong. Registration for most conferences is way down. We are all Zoomed out. But, really, as we start exchanging insights about the challenges, we discover what we already knew just by looking at ourselves. We don’t go to conferences for the education. We can get that online. We go to see and hug our friends and colleagues from around the country that we only get to see at the conferences and to have the kind of information exchanges that only happen in person. Missing out on that interaction is wearing on all of us.
There is a bright side to all of this. At the beginning of the pandemic, many of us in the retirement plan community figured out quickly that we needed to be able to talk to other business leaders in our community. We needed shoulders to lean on and sometimes cry on. We needed people who understood what we are going through as business owners in this unique industry. We began having Zoom happy hours and our normal monthly roundtable meetings became weekly. We no longer had telephone conference calls. What fun was that? We needed to see each other.
Now that we have realized that life and work have to go on with COVID still lingering instead of going away as we had hoped, we have begun having less frequent happy hours and roundtable virtual meetings. However, I think everyone would say that through this, we have all created new friendships and deeper bonds with our fellow business leaders in this incredible community. We are living through this pandemic together, sharing our resources and our ideas and virtual hugs when they are needed. When we can all be together in person again, the hugs will be much bigger and more plentiful. I think even my friend, Lynn, the most hug-averse person I know, won’t even cringe as I come in for the big post-COVID squeeze.
Challenge 6: Cybersecurity
Everyone knows there are bad guys out there, and they all seem to multiply during times like a pandemic. Prior to this, we knew that cybercriminals were starting to attack record keepers in our industry, but the cyberattacks have gotten even worse since the pandemic. All of us know that cybersecurity is important. Many of us have been taking steps to increase our own security. Even small TPA firms have been tightening up. However, during the pandemic, I believe it has become even more important and more urgent.
A couple of years ago, we had our IT company run a cybersecurity audit on our firm. The audit showed us where we had a couple of holes that needed to be fixed, and we fixed them. However, this is the one topic that really keeps me up at night. I know that I have asked my IT company to lock everything down, and they say that they have, but how do you ever really know?
Before the pandemic, I knew that I still had work to do on my cyber policy and practices. Well, now that I wasn’t driving to meetings, it was time to get to work. I asked for advice from my roundtable. I watched webinars. I started making my team watch cybersecurity training webinars. We took the time to get a password manager put into place. We hired a company to test our team and counsel them and monitor whether or not they clicked when they shouldn’t. We even put a cyber policy into writing instead of just verbalizing our expectations. We made some excellent progress, and then it hit me. I was watching a cybersecurity training webinar for business owners. They pointed out something critical to me that I had never thought of. We have taken every step possible to make sure that we don’t email personal information from Outlook, and we have told our clients not to email personal information to us, but rather to use our secure portal. However, as TPAs, we are hoarders. We are afraid to purge anything that we might need later to back up our work or answer a question. We love documentation. In my training, I learned that email is the easiest way for a cybercriminal to gain access to my data (I knew that) and, if they get into my email, I am liable for every piece of personal information found anywhere in my email.
I have emails in my inbox that date back to 2014. What on earth do I need those for? I had over 50,000 unread emails in my deleted box (not to mention the read emails). My deleted box hadn’t been cleaned out in over three years. That night at the end of work, I pulled the trigger and I actual deleted my “deleted” emails. It was painful and scary, but I ripped the band-aid off and told my team that afternoon, that as soon as busy season was over, they were going to take time to clean out their emails and do the same. We were going to have a policy on how often they have to do this on an ongoing basis.
After cleaning out my emails, I began to obsess about my servers and even files in my office. We went paperless in 2008, but we didn’t go back and scan every paper file prior to that. It had always been our policy to retain every file, paper or electronic, for every current client forever and for every former client for seven years. When we moved to our new location 10 years ago, we purged and shredded all of the paper files for clients who had been gone at least seven years and we sorted everything else so we knew when to shred the rest of the files over the next few years. However, we had not gone through this process since then. It was always something we would get to. When a client left, we would move their client file on our server to archive it, but it still lived on our server. I had never ever purged my database in my plan administration software, for fear I might need to prove that some participant had received a distribution or a former client needed something and I could be the hero (not that they would appreciate it). I had client and personal participant information in my database dating back to the early 1990s, when my software was still DOS-based. This was not totally paranoia on my part: I actually had a client that had terminated my services call me after 10 years needing data from my database; I laughed when they were disappointed to find that I had it!
Fast forward to COVID, and I realized that, if we were hacked or the office was broken into, I wasn’t only responsible for the information I had for current clients, but that I had opened myself up to liability for over 800 plans and over 80,000 participants for whom I had Social Security numbers, dates of hire and dates of birth.
Lucky for me, my son had just graduated with his master’s in accounting and was spending the summer working for me while he studied and took his CPA exam. It was time to purge. We purged paper files and computer files and our database. We only kept information for current clients and developed a new data retention policy. We also put a password manager into use for all of our team and began running phishing tests as well. And we are exploring moving everything to the cloud and out of our physical office building. Nothing like a pandemic to make you get those projects done that you keep putting off until tomorrow.
As a side note, my attorney advised me years ago to change our service agreement to reflect that we will keep records for only a specified number of years after our services are terminated. It is important for us to remember that the legal burden of keeping records under the Employee Retirement Income Security Act (ERISA) is really with the plan sponsor, and we provide the sponsor with enough information in the annual administration package to answer the questions that could be asked about historic contributions and distributions. So it’s important to make it clear that you are not taking on that responsibility for the plan sponsor, and that it cannot rely on you to do so—particularly if you historically have kept everything for the client.
Challenge 7: Sales and Marketing
It’s funny that one of the most frequent questions we ask our friends in the industry at the start of every happy hour or virtual hangout—second only to: “Are you back in the office yet and, if not, when will you be?” —is “Are you doing in-person sales and marketing meetings yet?” Every place around the country is different based on the new cases still occurring. Many companies have instructed their salespeople or financial advisors not to hold in-person meetings. A lot of them are cheating and doing it anyway. One of my wholesalers has only done three in-person meetings and they were all finals presentations. Since COVID, I have been required to do only two in-person meetings. It’s funny, they didn’t even ask if I was comfortable with it or wanted to. They just scheduled it and told me where to be. At both meetings, no one wore a mask and they all shook hands.
I will say that it is terribly hard to see a person’s facial expressions under a mask, and it’s really hard to understand what they are saying. You really have to pay attention to their eyes (they really are the window to the soul) and their body language. Several people have asked if they could come by my office for a meeting. I very nicely suggested that my schedule was packed and suggested that I could fit in a Zoom meeting instead.
One of the two in-person meetings was a finals presentation and we ended up winning the client. The other turned into a very good proposal that we are still working on. I am going on my third meeting next week.
I think that the industry the person is in has an effect on whether or not they want an in-person meeting. If they never shut down or they make their living being with people, they prefer in-person meetings and assume everyone does. I think that, as a TPA, most of us used to be or still are slightly introverted and can easily fall back into the habit of never leaving our desk, even if it is at home. We can get very comfortable with that. However, since my daughter is back in school in person and my son came home from A&M this weekend to visit, I guess I can brave an in-person meeting, as well. I will just wash my hands and not touch my face.
Challenge 8: Looking on the Good Side
There are some good things that have come out of this. We all have more time with our families. We got to have our son home for five months that we were not supposed to have with him. Since he will commission into the army after graduation, those five months were precious. I get a lot of bonding time with my daughter, because there’s not much to do other than hang out, and she has taken up golf with me. We have gotten to spend a lot more time than we would have with our oldest son and his fiancé and help to plan their wedding. My husband and I have spent a lot more time together as well, although we would have rather spent some of that time traveling together instead of being stuck here.
Professionally, I have learned a lot of new things about running a business. Even after more than 20 years in business, there are always new things to learn. I have made new friends and deeper bonds with old ones in our industry. I have always known how unique our industry was and how kind and wonderful the people were, but through this, it has become even more apparent, and I cherish it and feel lucky to be a part of it. So many people have offered help and advice to each other. They share openly and collaborate without concern over competition. They share their talents openly and freely. Industry partners and software vendors have expanded their services without increased costs and have worked to offer helpful education, not only in regard to rules and regulations but also in dealing with self-care and well-being during these times.
At Texas A&M they have a saying: “From the outside looking in, you can’t understand it. And from the inside looking out, you can’t explain it.” I have thought about that saying so many times throughout this pandemic as I share time with others in this industry. It is so true for the retirement services community. There aren’t many industries that care for not only their clients but their colleagues as much as those in our industry. If you need something, there is someone more than willing to give it to you. To me, it’s an amazing industry to be a part of, and through this, I cherish it even more. I personally couldn’t have made it through this if I had been left on an island by myself to figure it out. It has been a lifesaver to have people who understand what I’ve been going through because they know our unique industry like no one else can.
I hope that you all are well and I pray that we get through this soon. However, even through the challenges we have faced, I believe we will all be stronger people for it and our industry will be, too.
Shannon M. Edwards, ERPA, QPA, QKA, APA, APR, CPFA, is President of TriStar Pension Consulting.
Opinions expressed are those of the author, and do not necessarily reflect the views of ASPPA or its members. This article is also available in TriStar’s website, here.
©2021, CCH Incorporated. Reprinted from Journal of Pension Benefits, Winter 2021, Volume 28, Number 2, pages 55–58, with permission from Wolters Kluwer, New York, NY, 1-800-638-8437, www.WoltersKluwerLR.com.
- Log in to post comments