Q&A With a TPA: Kelsey Larson of TSC 401K

This is one in a series of Q&As about building your business with a TPA partner. In the Loop asked Kelsey Larson, director of operations for TSC 401K, about successful partnerships, and the challenges and opportunities in the retirement plan industry today. We’re sharing her insights here.

Why is it more important than ever for an advisor and a TPA to partner?

Retirement plans have changed more in the last three to four years than they have in the last 20-plus years. Partnering with a TPA can offer several advantages to an advisor. As TPAs, we specialize in one thing — retirement plan compliance.

With SECURE and SECURE 2.0, things are ever changing and there’s a lot of noise. All the buzzwords and plethora of information can be overwhelming. TPAs can offer guidance on what to pay attention to. For example, TSC 401K developed a guide to help determine whether an employee qualifies as a long-term part-time employee. We created examples based on an employee’s year-end eligibility.

TPAs also provide insight on how a plan sponsor can stay competitive in the marketplace. We administer plans for a large number of clients in specific markets. We’re able to tell an advisor what we're seeing within different industries and support their ability to help their clients remain competitive.

For example, the marketplace changed drastically after COVID in terms of plan operations. We worked closely with many of our advisor partners and their clients on what their plan needed to offer to remain competitive.

For a TPA, advisors are the important glue for our relationships with employers. Financial advisors have more personal relationships with business owners and clients. They're a critical resource for driving the relationship. They help us understand the best way to communicate with a client and how to work well together.

What does successful partnering look like to you?

Collaboration is key to a successful retirement plan partnership. A successful partnership is when a TPA is focused on the technical aspects of retirement plan administration and compliance — and their services complement and enhance the work of advisors.

If advisors understand what we're offering and support us, this can strengthen the relationship they have with plan sponsors. For example, I’ve been sitting on a weekly call with an advisor and their client, a large engineering firm that has been going through several mergers and acquisitions. It’s an important meeting that we do together because we both offer a different perspective and have distinct focus areas.

When we partner together, we're a much stronger front. We should be able to pick up all the issues that each of us individually would not necessarily pick up.

What are the biggest challenges and opportunities facing the retirement industry today?

There are three notable trends that present challenges and opportunities in our industry.

First, the retirement industry is facing significant changes due to recent legislation, notably the SECURE Act and its successor, SECURE 2.0. While these changes offer opportunities to expand retirement plan coverage, participation and plan design options, they also present challenges.

Plan sponsors must adapt to new requirements, such as expanded eligibility for long-term part-time workers, changes to the use of Roth contributions, and new contribution and distribution options. Plan updates require careful planning and implementation to ensure compliance and minimize disruption.

Second, technology and innovation are transforming the retirement industry with new opportunities to enhance services and efficiencies. While data sharing through APIs and AI technologies promises to play an ever-increasing role, it should in no way replace a person. Instead, technology should be used to free up time from repetitive tasks that are not adding value.

We analyze whether the technology is going to free up time. How can this technology help our people focus more time on supporting our plan sponsors? What can this technology take off advisors’ plates, so they have more time to consult on plans and communicate with their plan sponsors?

The third trend I see is a shift in the demographics of retirement professionals. As experienced professionals retire, the retirement industry is facing challenges associated with succession planning, as well as knowledge and expertise retention.

To ensure a smooth transition and continuity of service excellence, the industry must continue to develop future retirement plan professionals. There's a big opportunity for newer employees to gain expertise and take on leadership roles. Mentorship and training programs, along with professional development opportunities, can support the transfer of institutional knowledge and skills.

If you’re looking for more TPA business-building ideas, we can help. Contact your regional vice president for more information.

Kelsey Larson, QKA, is the director of operations for TSC 401K, a Blue Ridge company. Based in Maple Grove, Minnesota, TSC 401K offers retirement plan consulting, design and administration solutions for businesses and their financial advisors. TSC 401K is a long-time partner of The Standard. The firm has worked with Securian Retirement — now Standard Retirement Services — since the early 2000s.