It’s all friendly between the plan sponsor and the Third-Party Administrator (TPA) until the plan sponsor wants to make a change. Then it could get nasty when the TPA wants to be compensated for doing work for the reconversion process.
I’ve been on both sides of the coin, as an ERISA attorney for the TPA and for the past 17 years, on the side of the plan sponsor. In a world of fee transparency, the termination of the TPA is when things are still murky. This is an area where the Department of Labor (DOL) could add some transparency for once and all. It is my opinion that if a TPA doesn’t mention termination/deconversion fees in their contract, they shouldn’t be. Entitled to them. That’s my two cents and I imagine that continued abuses by certain TPAs will eventually lead to DOL action.
