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  • The #1 habit of growing TPAs is collecting good data

    The beginning of the year is a time when the strategies and plans that were established the prior year are put into action. Collecting census data and issuing 1099s for distributions have been the focus of many TPAs up to this point. These tasks require the use of accurate data to ensure accurate testing and reporting.

    Good data collection habits are like the advice you get from your doctor – eat healthy and exercise regularly. This advice seems simple and obvious but has long-term implications if you choose to ignore it. Unfortunately, poor data collection habits are a metaphorically similar liability that can cause serious long-term issues for your firm. To combat them you must implement thorough processes and efficient use of systemization.

    Take the annual collection of census data for example. In January, you sent out your first round of email communications to plan sponsors and the data is starting to trickle in so you can begin the annual compliance work for your clients. We all know how much time can be wasted if the compliance work was based on incorrect data. From my vantage point at PensionPro, the number one habit I see of healthy growing TPAs correlates to the efficiencies they have built into their processes and the ability to execute these processes effectively year after year. Time spent developing good data collection processes is invaluable.

    Plan sponsors may be pressed for time, resulting in a rush to submit the data. This can result in the submission of incorrect data to the TPA. Rather than accepting incorrect data and thus absorbing errors and increased liability, TPAs have the challenge of collecting comprehensive data, while still providing the easiest possible user experience for the plan sponsors. This notion was at the very heart of developing PlanSponsorLink. Every year our clients receive more accurate data, in a more timely manner, with less frustration from plan sponsors. It is a win-win for both parties.

    If you are using email, spreadsheets, MS Access, or perhaps even paper to run your TPA firm, I am here to tell you there is a much better and more secure way. I have seen many gifted Excel users in my time in the retirement industry. However, they too are at the mercy of the data that is input into the master sheet. Whatever system you use, you must make the time to ensure that the inbound data is in good order. The old statement is true when it comes to your data: garbage in, garbage out. Take the time to do it right on the front-end, future you will thank you this time next year.

    If you would like to see PensionPro in action, please sign up for a product demonstration here.