TPA

All change please

Since the late 1990s, out-sourcing to a TPA has become more and more popular. In recent years, TPAs have invested huge amounts to develop their service. Mergers and acquisitions in the TPA market have made tracking the best service somewhat challenging. In some cases, the amalgamated business operates multiple smaller operations, effectively adopting them. In other cases, the incoming TPA is integrated to a single infrastructure, leaving the legacy TPA model as a distant memory.
If your TPA changes around you, the contractual protections built in at outset could be very important. These should help trustees and sponsors to maintain control over their own destiny.

Lead from the top

The strategy of a TPA needs to be clearly understood to get a good insight into how their plans might align to the trajectory of your scheme. Typically, out-source contracts run for 5 years. It is therefore very important to get as much information as possible around where your TPA might be towards the end of that time. Top of the list is a clear systems strategy. In today’s communication age, this is less about the database and more about web enablement and member education.
Other leadership thinking around their Quality trajectory and how they partner with clients is very important. Consider how well this is genuinely embedded in their culture. Care may be needed to determine whether the TPA is simply adapting a special service for a particular scheme which may not be sustainable long term.

Best fit needs measuring

Identifying the best administrator is not an easy task. The range of offerings is still wide and a great deal of marketing material paints over a canvas which is, in reality, very difficult to see without close scrutiny. Clearly it is better to find out what service you are likely to get before you appoint a provider, especially for the medium to long term.
Working out how to incentivise your TPA and measuring their performance is something to consider seriously from outset. The cultures of each TPA vary considerably so it is best to choose wisely based on full disclosure.
You can see a list of TPAs here.

Navigate with care

Implementing a service with a TPA is much easier if you have done it before. You will know some of the pitfalls and have an idea what to look out for. If not, it is definitely worth using a specialist transition manager which can also provide a quality assurance plan. The pace-versus-quality dilemma is a constant challenge for these projects. Getting it right during the selection process can pay dividends for all concerned when it comes to implementation.
It is unfortunate that many schemes in a poor place with their TPA can trace their issues back to the day they went live. Make sure this does not apply to you, there are some great case studies out there to follow for success.