There are those TPA that sell financial products, there are some that sell insurance, and there are those that just administer and record keeping.
This story reminds me of another producing TPA that is only a few villages over from where I live. I interviewed for an attorney position there around 20 years ago before my son was born when I was serving as the lead attorney for another New York-producing TPA. The owner of this TPA said my TPA was not in the administration business but in the asset-gathering business. Looking back, it was kind of funny because this TPA was consistently butting heads with the IRS over these special trusts with special trustees for these defined benefit plans stuffed with life insurance policies. In addition, I once reviewed a plan of theirs when the plan moved over to my TPA. The defined benefit plan has a normal retirement age of 35! This was not the defined benefit plan for professional athletes, this was a plan for a food wholesaler. This was before the IRS instituted that any normal retirement age before 62 is suspect, so we didn’t take the plan over since I stated that the normal retirement age was not reasonable for that industry and was just used as a gimmick to have inflated tax deductions. In other words, it was a tax evasion scheme.
The lesson to be learned here is that some TPAs are in the insurance-selling business, the asset-gathering business, and the administration business. Pick a TPA whose main business is plan administration.
