In any service industry, there’s a wide range of quality and pricing. People often tell me I focus too much on third-party administrators (TPAs), but that’s where I’ve spent a lot of my career—as an ERISA attorney and former TPA employee. I know the business inside and out.
I get asked all the time, “Ary, do you work as a TPA too?” My answer is always no—and it’s simple: I respect the work TPAs do way too much to jump into their lane. It’s not just about pushing paper; it’s complicated, and it requires real expertise. The good ones get too little credit and too much blame.
What I see, time and again, is a huge difference in service quality—far beyond just price. Take one of my clients, for example: stuck with a TPA that’s really just an insurance company in disguise. They sold the client life insurance policies the company couldn’t afford and set up a “special” sub-trust that the IRS no longer recognizes as special. That’s not administration—that’s selling snake oil.
Now the client is trying to get out of a plan that’s a half million dollars underwater. A new TPA who actually knows their business took one look and said, “This should have been wound down years ago. Why didn’t the old TPA tell you that?” Well, because the old TPA wasn’t really in the administration business—they were in the insurance sales business. And terminated plans don’t pay fees or premiums, so it’s no surprise they dragged their feet.
When it comes to choosing a TPA, price matters. But it’s service quality that makes or breaks the whole deal. A cheap TPA who can’t—or won’t—give you honest, proactive advice will cost you more in the end. The right TPA is a partner, a trusted advisor who knows ERISA, knows your plan, and is looking out for your best interest.
That’s why I focus on the good TPAs, and why I don’t try to be one myself. Let the experts handle their side of the business—and hold them accountable.
