A New Way 2 401k

TPAs Think They Are So Smart

Back in the day, I think it was important for TPAs to impress or confuse clients. TPAs charged a lot of money and as crazy as it sounds I think they wanted their clients to feel like this compliance and admin stuff was so confusing that they better just pay up and do what the TPA says when it comes to their retirement plan. This industry has a lot of hangover effects from that past, a past that many TPAs still seem to be living in.

One of the negative bi-products of that era is the current 401(k) client communications. Let me highlight one in particular, the infamous Failed ADP Test Letter. All of us industry people know this one, right? It uses IRS Code and very professional (uppity) lawyer speak, the piece typically uses bold and underline as it brings attention to deadlines and potential penalties. It cultivates a very scary and fear driven moment for the person reading this communication. Probably worst of all, it is very difficult for your average Plan Sponsor to understand what the heck is going on.

I think there is a better way, no I am going to say it….I think this way sucks and is completely blind to one of the most important things, the experience of the person reading the darn thing. Why not a client communication that is written the same way you would explain this situation to a friend or family member? Well, it just so happens that one of my current clients is indeed my good, beer drinking, football watching buddy. He runs a very successful company and he recently failed his ADP test. So what did I do? I met him at his favorite local restaurant and we grabbed a cold beer at the bar. The first thing I said to him was not to worry and that after I explained these stupid Government testing rules, I would highlight how my team would be his hero and make sure everything is fixed and handled properly. I then explained what failing an ADP test is and how it was no big deal and that he was not the only one. I told him we would not use the word “fail” and that I would just call him “ADP test challenged.” He laughed. Why cant client communications be written in actual Human Speak as opposed to this pretentious, mightier than thou crap? It can and that is exactly what we do at Plan Design Consultants, we call it easyspeak

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