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UNCLAIMED PROPERTY FOCUS is a blog written by and for UPPO members, featuring diverse perspectives and insights from unclaimed property practitioners across the U.S. and Canada. We welcome your submissions to Unclaimed Property Focus. Please contact Tim Dressen via tim@uppo.org with any questions about submitting a blog post for consideration and refer to our editorial guidelines when writing your blog post. Disclaimer: Information and/or comments to this blog is not intended as a substitute for legal advice on compliance or reporting requirements.

 

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Considering and Evaluating Third-Party Administrators

Posted By Administration, Thursday, July 16, 2020

Third-party administrators provide useful services to businesses who may not have the capabilities or desire to handle their own unclaimed property responsibilities. TPAs provide a broad variety of services, including:

  • Compliance services, such as assisting with policies and procedures and preparing holder reports.
  • Reporting services, including due diligence and record keeping, full-service reporting for all property types, or reporting for select property types.
  • Accounting services, such as issuing checks and administration of voided and reissued checks.
  • Audit services, including assistance with unclaimed property audits or voluntary disclosure agreement programs.

Deciding whether to hire a third-party administrator begins with assessing your company’s current unclaimed property compliance capabilities. Consider the areas where you need the most help. Do you need assistance only with due diligence, or reporting as well? Do you need help with all property types or just a few? What budget is available? Does working with a third-party fit your company’s strategies and capabilities better than hiring one or more employees to fill the same role?

 

When interviewing potential partners, ask important questions regarding the TPA’s services, such as:

  • Does the TPA track, implement and share legislative, regulatory and legal changes?
  • Will the TPA indemnify your company for late or erroneous reports?
  • What is the TPA’s experience with companies similar in size and in the same industry?
  • What is the TPA’s experience tracking dormancy triggers?
  • What is the TPA’s experience defending its reporting in an audit?
  • What relationship does the TPA have with state administrators?
  • How does the TPA keep your data secure and will it indemnify your company in the event of a breach?
  • What reports will the TPA provide to ensure standards are being met?
  • Does the TPA use address verification services in advance of due diligence outreach?
  • What is the fee structure and total annual cost?

When evaluating whether working with a TPA makes sense, it’s especially important to understand that hiring a TPA does not absolve a company of its reporting responsibilities. Even with contracts requiring the TPA to handle unclaimed property, states still consider the company the unclaimed property holder. Responsibility ultimately falls on the unclaimed property holder.

 

If the TPA fails to fulfill the obligation, states will hold the holder accountable to fulfill outstanding obligations. As such, setting clear expectations when contracting with a TPA is essential at the outset. Identify who owns reporting-related functions internally and externally and ensure roles and responsibilities are clearly defined in the contract.

 

Because many companies have limited internal resources for unclaimed property management, third-party administrators play a vital role in the compliance process. Taking proactive steps during the evaluation process helps ensure a positive, long-term relationship between the holder and TPA.

 

To learn about UPPO members offering TPA services, visit our Service Provider & Vendor Directory. 

Tags:  servi  third party administrators  TPAs  unclaimed property 

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