The opinions expressed in this presentation are those of the speaker. The International Foundationdisclaims responsibility for views expressed and statements made by the program speakers.

Succession Planning for Plan Administration

William J. EinhornTrusteePennsylvania Employee Benefits Trust FundTeamsters Health and Welfare and Pension Trust Funds of Philadelphia and VicinityAdministrative ConsultantWayne, Pennsylvania

James J. HynesExecutive AdministratorPipe Trades Services MNWhite Bear Lake, Minnesota

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Agenda

• Identifying Critical Positions and Competencies

• Internal Development or Outside Recruitment

• Developing Internal Talent• Time lines, Roles and Responsibilities• Succession Planning for Key Plan Providers

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What Is It, And Why Do It?

• Succession Planning– The process of preparing for the transition/loss of

critical personnel in an organization– Not waiting until an employee has departed

before planning for a successor • Ongoing operational effectiveness—Cross training• Planned succession (retirement) or unplanned

• Succession planning is really “Success Planning”– Put it off at your peril and the peril of the fund!

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Begin With The Basics

• Understand the risks to the business, the benefit funds and ultimately the members without any succession planning

• Questions– Is succession planning really necessary?– What should you do to prepare for succession?– What process or processes should you, as a fiduciary,

consider?– What the resources are necessary for succession

planning?– Does succession planning mean more employees?

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Identify Critical Positions

• Identify positions that have the highest potential risk for vacancy

• Identify positions with the longest “learning curve” to get a new employee up to speed

• Determine the impact of a vacancy in a particular position(s)

• Do you have operational manuals in place?– What does “Joe” in the Remittance Department do on a daily, weekly,

monthly, quarterly, semi-annual, or annual basis?– How about Mary in Accounting? Mike in Member Services? Brian in IT?

Beth in Collections?

• Great opportunity to perform an operational audit of your organization and its internal controls

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Identify Critical Positions (continued)

• Fund operational procedures should be documented– “User Guide” or “Manual for all major fund

procedures and operations– Calendar when duties are performed– In the event of a loss of a key staff member,

the successor or other fund personnel can “hit the ground running” without significant disruption

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Identify Critical Positions (continued)

• Do you have an organizational chart?– Key staff, lines of reporting, who does what– Modify the org chart to show possible successions

• Internal Development or Outside Recruitment– No right or wrong answer– Large gaps in skills may identify positions where

outside recruitment is necessary– May depends on the size and scope of the organization– Recruiting through the trade serviced by the Fund– Address the potential domino effect of internal

promotions

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Identify Critical Positions (continued)

• Internal Development– Perform a skills assessment, know your risks– Identify current strengths– Identify employees developmental needs– Develop a plan to improve employees’

knowledge, skills and abilities – Prepare employees for new roles and

advancement– Evaluate as employees take on additional

duties or move into new roles

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Identify Critical Positions (continued)

• External Recruitment– Perform a skills assessment, know your risks– Identify internal current strengths– Identify gaps within the internal staff– Develop a plan to attract, recruit and retain new

employees with the necessary knowledge, skills and abilities

– Implement the hiring and onboarding process giving consideration for the need to have duplication of staff for a period of time

– Evaluate the progress of new hires

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Identify Critical Positions (continued)

• External Recruitment– Fund legal counsel can be very helpful– Head hunters—Helpful, but can be costly– Other sources

– Other issues• Starting salary . . . relocation allowance . . . sign-on bonus,

immediately eligibility for health coverage . . . fringe benefit package . . .shadowing existing staff during training/onboarding

• IFEBP “Jobs in Benefits”• Career Change• Career Builder• Indeed

• TheLadders.com• Simply Hired• Zip Recruiter• Monster.com

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Time Lines, Roles, Responsibilities

• Plan NOW, Start NOW!• Timelines—Largely dependent on your organization and

the position• Set specific transition goals and timeframes• Roles and Responsibilities

– Leverage existing staff in planning and training for new roles or new staff

– They are the subject matter experts– If possible, allow flexible schedules for those approaching

retirement– Provide internal candidates with special projects

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Succession Planning for Key Service Providers to the Plan

• Attorney, Actuary, Auditor, Record keeper, Software provider, Investment managers, Banking relationships– Succession planning or business continuity

planning is a means for an organization to ensure effective performance through leadership stability both within the organization and with key service providers

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Key Service Providers

• As a key service provider and business partner:– What is the long-term direction of your company? Do you have an

effective Strategic Plan guiding your business course and direction?– Are there applicable portions of the Strategic Plan that can be shared

with our board members? – What are the key areas which require continuity and development of the

people resources within your company?– Who are the key people you are developing and will nurture for the

future?– Please provide specific names, education, work experience, and other

pertinent details.– What is the plan for integrating others in your firm into both the work

flow and interaction with Fund staff and board members?– Any other information that you believe would be helpful to us during this

planning and risk mitigation process.

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Key Service Providers (continued)

• Third Party Administration model– Services agreement should delineate and define scope of

duties– Who does what?– Agreement should obligate the TPA to notify the trust of

change in ownership or key TPA personnel– Contract should require release of transition files

• Census/eligibility; claims history; provider file; remittance; retiree files—In pay status and/or in process

• Have a request for proposal undated and ready . . . just in case!

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What Else?

• Don’t forget . . . less tangible but critical skills – Ability to motivate and inspire others– Intellectual and strategic strength– Strength of character and temperament– Ability to communicate at different levels, with

different audiences, members, board members and plan professionals

– Manage expectations and appreciate the strengths of others

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62nd Annual Employee Benefits ConferenceNovember 13-16, 2016Orlando, Florida

Session #A06 Succession Planning for Plan Administration

• Start NOW, not later—Succession planning is important and should not be overlooked

• Start with a skills assessment looking for gaps within your team

• Determine if those gaps in skills can be filled from within by internal staff or will outside recruitment be necessary

• Assess the succession plans of key service providers

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2017 Educational ProgramsAdministration

63rd Annual Employee Benefits Conference October 22-25, 2017 Las Vegas, Nevadawww.ifebp.org/usannual

Trustees and Administrators InstitutesFebruary 20-22, 2017 Lake Buena Vista (Orlando), FloridaJune 26-28, 2017 San Diego, Californiawww.ifebp.org/trusteesadministrators

Washington Legislative UpdateMay 22-23, 2017Washington, D.C.www.ifebp.org/washington

Essentials of Multiemployer Trust Fund AdministrationJune 5-9, 2017Brookfield (Milwaukee), Wisconsinwww.ifebp.org/essentialsme

Fraud Prevention Institute for Employee Benefit PlansJuly 17-18, 2017Chicago, Illinoiswww.ifebp.org/fraudprevention

Related ReadingVisit one of the on-site Bookstore locations or see www.ifebp.org/bookstore for more books.

Employee Benefits Glossary, 13th EditionItem #7570www.ifebp.org/glossary

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