“In the factory we make cosmetics; in the drugstore we sell hope.”

That quote by Charles Revson, the co-founder of Revlon, has been my touchstone for periodically re-evaluating how and where our TPA firm fits into the business environment.

When I first started the firm, it was pretty simple and straightforward. We were a third party administrator that provided consulting, actuarial, and administration services for retirement plans sponsored by closely-held companies.  

Time hasn’t changed that, but time has changed the business environment in which we operate. It’s not just the obvious continual fallout from 2008 and the still recovering economy. It’s change driven by two sometimes complementary, sometime competing forces: demographics and entitlements.

We can see these forces being played out in two pivotal arenas:  

The first is Congress, at this writing, still at an impasse regarding the federal budget and the debt ceiling.

The second is stepped-up oversight by the Internal Revenue Service regarding tax aspects; the Department of Labor regarding fiduciary matters; and the Pension Benefit Guaranty Corporation regarding pension plan funding.

So while we’re still providing the same services mentioned above, our business environment has changed. Charles Revson might describe it this way:

We, and our adviser business partners, sell Optimism. Justifiable optimism, I might add, that our business owner clients and their employees will have adequate income at retirement.

Pretty good business to be in today.

Jerry Kalish is an EBA Advisory Board member and President of National Benefit Services, Inc., a Chicago-based third party administrator. He is a Guest Lecturer at John Marshall School of Law LLM Program in Employee Benefits and serves on the Great Lakes IRS Advisory Council for Tax Exempt and Government Entity Plans. Jerry has been publishing The Retirement Plan Blog since 2006. He can be reached by email at jerry@nationalbenefit.com and followed on Twitter.

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