Deep Thought on Administration: Say What You Mean and Mean What You Say

By Shannon M. Edwards

Shannon M. Edwards has been in the retirement plan industry for over 30 years. She founded TriStar Pension Consulting more than 20 years ago. Ms. Edwards has been a credentialed member of ASPPA since 1996. She formerly served as a member at large on the board of directors of the American Retirement Association (ARA). She currently serves on the ASPPA Leadership Council, the ARA Women in Retirement Council, and the ARA Legislative Relations Committee. She has co-chaired the ARA Women in Retirement Conference (WiRC) as well as the ASPPA TPA Growth Summit. In addition to ASPPA, Ms. Edwards is a credentialed member of the National Institute of Pension Administrators. In addition to the volunteer work she does for ASPPA and ARA, she volunteers for several local non-profits in Oklahoma. Ms. Edwards and her husband have three children. They are all die hard Sooner fans and thanks to her middle son, they are now adopted Fightin’ Texas Aggies. When she is not working to empower participants to be able to retire on their terms, she enjoys spending time with her family in the mountains, on the golf course, and on the beach.

How do you feel when someone starts speaking out against something they said that they supported? How do you feel when someonespeaks out against new rules that would improve things, and that they said that they were for? How do you feel when someone is clearly acting and speaking in a way that illustrates that they are more worried about how something affects them than how it improves the lives of many and of those that they have professed to serve?

I can tell you how I feel. I feel frustrated. Do not get me wrong. I too have been known to look at change through the lens of how it will affect me. What am I going to have to do now? What additional services are clients and financial advisors going to expect me to offer without an increase in my fees? I understand the tendency of business owners and managers to view situations in this narrow way, rather than expanding out to see the big picture.

Face it; we are all under a lot of stress and pressure every day to make sure that our clients are serviced, our employees are happy, the centers of influence that refer us work are satisfied, and our businesses are growing. Not to mention that everyone wants more from us for less. The laws governing our industry keep changing. They become more complicated every time a new law is passed. It can be daunting to figure out how to market these changes to grow our businesses, how to redefine our policies and procedures to adapt to the changes, and how to explain all of the changes to our current clients and referral sources. Not to mention that we are left to run our practices and to serve our clients in the best possible way with a shortage of talent in an environment where our services are being commoditized and everyone wants us to work for free.

Third-Party Administrators (TPA) (or Compliance Consultants, as I prefer to refer to myself) are constantly faced with the challenge of having to prove why we are better than bundled services offered by larger financial institutions. We must prove why the independent TPA firm still matters and brings value to the industry. However, if you ask most compliance consultants, the owners of the firms, the managers and their team members, why they do what they do every day and why they love what they do, they will all say that they do it to improve the lives of other human beings and make it possible for them to retire and live a dignified life after retirement in the manner of their choosing.

If this is truly our “why” as an industry, then why are so many TPAs questioning and complaining about the new options offered to plan sponsors by SECURE 2.0? Why are so many complaining about the extra work that will be involved in providing the new choices offered in SECURE 2.0? I will admit that it is going to take hours to learn all the options they’ve added with this law and the rules both logical and illogical that go with those options. It is going to take hours to explain the new law to all our existing clients and referral sources. I had an advisor call on the Monday after the law was signed, frantic because he thought the plan document had to be amended imme- diately. I had not even finished reading the summaries of everything that was in the law by then.

I can choose to look at this as a challenge that I campaign against and complain about. However, as one who professes their “WHY” to be improving the lives of Americans so that they can retire with dignity, I choose to look at this as a way to improve our indus- try and expand the opportunity to save for retirement to thousands of people who did not have that oppor- tunity before SECURE 2.0. I am going to say what I mean and mean what I say.

I want to start by explaining my personal evolution over the past several years. In the past, I have been known to wonder why the American Retirement Association (ARA) would support certain proposals and not others. I would wonder this especially when there were proposals in Washington that did not appear to be beneficial to a small independent TPA firm like mine. Why would they choose to support a bill that, on the surface, appears to be harmful to one of their members? The most recent example of this would be the support of the pooled employer plan (PEP) legislation in SECURE 1.0. However, some very wise people who are very active in lobbying for legislation and drafting proposed legislation and edu- cating those on Capitol Hill, explained some things to me about the process and the environment that they must operate in. This helped change my view when it comes to what the ARA as an organization supports and to quit focusing first on how it affects me and instead focus first on how it improves the industry as a whole and expands coverage. It taught me to understand that, first and foremost, the ARA Government Affairs Team is always looking out for its members. There are times when legislation is going to pass. There is nothing that can be done to stop the train as it is barreling down the tracks even if we want to. In those cases, they work to make it the best legislation it can possibly be (maybe even do the least amount of harm to our industry as possible). There are times too when legislation may not make sense for me personally but for the people who are not covered by a plan, it makes perfect sense and it’s my job to appreciate that it’s not about me if I am truly living my why.

The key to changing how you look at this new legislation and future legislation is first to get involved. Don’t wait for the train to run you over. Understand what the goal of the proposed legisla- tion is. Understand the why behind the legislation both from the congresspeople that proposed it, those who support it and from the view of the ARA Government Affairs team who works on your behalf in Washington. Remember as you listen to what is said that “the needs of the many outweigh the needs of the few.” If something in the legislation seems to be bad, but many are supporting it, then try to change the lens from which you are viewing it. Will it improve lives? If so, then how can you adjust to live with it or even use it to market yourself?

PEPs are a perfect example of this. Independent TPAs were furious that the ARA was supporting them. However, the fact was that the law was going to pass. Congress was hyper-focused on increasing participant coverage. PEPs were a means to an end. Instead of fighting it, the ARA worked to make it the best legislation it could be while also keeping PEPs on a level playing field with non-PEP plans so that PEPs had no unfair advantages. Once that was accomplished, two things happened. First, coverage was increased, which is one of the reasons everyone in this industry says they do what they do. Second, for the independent TPA firms, it became the same argument/marketing pitch that it has been for years as we sold ourselves against bundled providers. It was not the end of our firms and our livelihood. It was just another option for plan sponsors to consider and for us to sell against.

In the what-seems-like-hundreds of discussions I have been a part of both before SECURE 2.0 passed and since, I have heard a lot of peers complaining about some of the new provisions in SECURE 2.0. Some even saying that they will discourage their clients from adding the optional items. I understand that it is not going to be easy on any of us to imple- ment many of these new options and required changes. I, too, feel the stress of adding even more items to my to do list. However, there are some amazing options in this legislation that truly will expand coverage and improve the lives of Americans. I would challenge all of us, myself included, to say what we mean and mean what we say and embrace the changes.

“Live long and prosper.”