2008 looks good for Congruent Solutions. The outsourcing firm focuses specifically on supporting American TPAs, and executive vice president expects to more than double the firm's customer base in the new fiscal year. (Congruent's fiscal year ended on March 31, 2008.)
"Our goal for fiscal 2008-2009 is to add at least 60 percent more customers than we added last fiscal year," San Asuti told The 401kWire in an interview. "We're aiming for 25 total TPA customers by March 31, 2009."
John Mulligan, an industry veteran and the founder of Retirement Plan Strategies, described Congruent as "really a pioneer for offshore outsourcing in pension administration."
According to Asuti -- who leads Congruent's "customer-facing" US-based team in Cupertino, California and Lawrenceville, New Jersey -- the firm now "touches" at least 8,000 retirement plans, mostly DC, through about 10 TPAs.
One of those TPAs is Associates in Excellence, an administration and recordkeeping firm that works with about 1,400 DB and DC plans. President Bob Thurlow confirmed that he has been utilizing Congruent's services for several years. His own team still handles consulting and "highest level communications" with clients.
"I consider them partners as opposed to a vendor," Thurlow told The 401kWire in an interview. "It's a great relationship. I've been extremely pleased."
"We do different things with different plans," Asuti said, listing services that include: census management, compliance testing, loan administration and reconciliation, and 5500 preparation, among others. "All the heavy lifting gets done in Chennai, India."
Market shift?
Congruent's services, Mulligan said, were relatively new to the TPA marketplace, but those TPAs still proved more receptive than larger providers in the industry.
"The opportunity had never been presented to TPAs," Mulligan told The 401kWire. "TPAs are the first to move."
"TPAs are generally owner-managed, so they have a real appreciation for the profit motivation," Mulligan added. "It's not a corporate budget, it's your money."
Asuti told The 401kWire that the TPA market was "observing from the sidelines" at first, but lots of word-of-mouth marketing brought nine new TPA clients to Congruent during its last fiscal year. He gave some of the credit for Congruent's growth to Mulligan.
"He's shaping the journey of Congruent to be able to provide to the TPAs and the plan provider community in the US," Asuti said.
And Asuti even hinted that some of the larger 401(k) players may be coming. He confided that Congruent is "likely to have some big clients sign up this year," despite the "more elaborate" sales cycle at large corporations.
Next Stop: DB?
Congruent's newest venture is to perform outsourced defined benefit work for TPAs.
"We initially started with DC plans, but it was a natural transition to add DB administration last year," Asuti said, noting that Congruent already supports one TPA's DB work. "We're extending a related service into the same market. The customer is the same; we are simply adding another service."
To that end, and to handle anticipated growth in Congruent's core DC support business, Asuti said that he hopes to hire at least one DB actuary in the US, a "domain expert to manage communications with the customers."
"We're also looking for experienced DC administrators," Asuti added.
Source:http://www.401kwire.com/Default.asp?bhcp=1 |
