Q&A: Sal Tripodi
NORM: Sal, thanks for doing this interview with the ACOPA e-news. You’re probably the most well known person in the industry because of The ERISA Outline Book, which is everyone’s main reference. Did you just wake up one day and decide, “I’m going to write a 100,000 page book on pensions that everyone will use”? How did that develop?
SAL: Not quite. (And it’s about 10,000 pages, not 100,000 :-).) I struck off on my own in July 1994 and was putting myself out there to do seminars. As I started landing some seminar gigs I realized that I needed good training materials. So I started preparing outlines on key subjects. In 1995 I decided to turn what I had at that point into a publication that I could sell. It made sense to find avenues for generating income from my work developing these materials. The initial edition of The ERISA Outline Book was one volume, which I published and marketed myself.
NORM: I believe from Facebook that you have retired. But let’s go back to the beginning. How did you end up in this profession? What are the jobs you’ve had over your career? Give us a career synopsis.
SAL: I'm glad you asked this question so that I have an opportunity to clarify, at least to the membership, that I am not retired. I love what I do and am not ready to give it all up. So I have started a gradual phasing out of my work. The first to go, which I have started this year, are my seminars. The travel and preparation are the biggest drain on my time with not as much financial reward as my consulting work and my book revenues. I, of course, have decided to retain the Hawaii Seminar in November for the time being. I have committed to doing that for at least three more years. However, I actively work on The ERISA Outline Book and still offer consulting services. Eliminating the travel has enabled me to stay much more current on the book, and to have the time to take a fresh look at sections of the book with an eye toward improving and enhancing discussions of certain topics. This also has helped in keeping the online edition more current.
Career synopsis: When I was getting out of law school, the IRS was advertising for a number of Tax Law Specialist positions. You had to be called from a register. The first department to contact me was Exempt Organizations, which didn’t interest me very much. But shortly after that, Employee Plans contacted me. They were hiring a bunch of new lawyers to assist with the review of plan amendments needed to comply with the initial ERISA regulations.
At that time, the IRS had a great deal of training resources. I was given an 8-week intensive course on all of the qualification rules. Six months later, there were another 8 weeks on higher-level issues, as well as ERISA. It really got in my blood. I thought the area was fascinating and promised to be an important field for decades to come.
In 1982, I was approached by Pension Publications of Denver to come out to Denver and assist in plan document and design consulting, seminars and prototype services. I never looked back. In 1994, I decided to go off on my own and started TRI Pension Services. As I mentioned earlier, development of The ERISA Outline Book came shortly after that.
So it turns out that a chance offer from the IRS led to a lifelong career for me.
NORM: If you were able to go back and have a do-over in your career, what would you change, if anything?
SAL: I really can’t think of anything specific. But my philosophy has always been not to look back. There are forks in the road all the time. I have always embraced whatever decisions I have made. Of course, things could have been different at any juncture if I had chosen a different course and, I am sure, I would have found the positives in that alternative course as well. I feel very fortunate that I have had the career I have had, and that I can continue to contribute to this field of practice.
NORM: You were involved in ASPPA leadership when the actuaries left ASPPA to form COPA, and you were on the group negotiating the terms of the ACOPA-ASPPA agreement when we came back into the ASPPA fold, right? Looking back, how do you assess the dynamics of what caused that initial split? Do you think it was inevitable, or could it have been prevented? In a way, it set the tone for the concept of sister organizations within ASPPA, right? Would that still have developed anyway? And now looking back, how do you assess the dynamics of the concept of an actuarial sister organization within ARA?
SAL: I think it was inevitable that as ASPPA expanded its categories of membership, there would be some membership groups that would get frustrated. It made sense to me that the actuaries were the first members to experience that. First, they were the founders of the organization. It is similar to the founder of a small business as the business grows and others take charge. It is usually a difficult transition.
Second, the potential for growth in numbers has been limited for the actuaries, while newer groups coming in as members have a much greater upside potential for membership growth. This is exacerbated by the fact that the ASPPA actuaries were filling a specific niche within an already niched professional market. The solution we worked out to bring the actuaries “back into the fold” was logical in my opinion, and I believe provided a means for the actuaries to feel more in control of their destiny than they were feeling when ASPPA leadership was trying to address the needs of all of its membership components.
This definitely blazed a trail for the ARA structure, and I believe it is the best form of structure for an organization whose strength is very much related to its diversity of membership and its ability to respond to the needs of many aspects of the private retirement system.
NORM: We’re in a profession in which, despite great reference materials like your EOB, there are huge areas where there is no guidance. With even more IRS budget cuts looming and in an environment that is anti-regulation, how do you think that bodes for the industry? How should practitioners go about their work in these grey areas?
SAL: Well I think we have allowed the IRS too much sway with respect to offhand comments and other forms of informal pronouncements that have not been in the best interest of the system. The fiasco on mid-year amendments to safe harbor 401(k) plans and the prohibition on allocating forfeitures to satisfy QNEC, QMAC and safe harbor 401(k) contribution obligations were two prime examples. In both cases, the IRS walked back their initial positions, but only after causing great upheaval in plan administration and plan document maintenance. Lazy legal reasoning like this needs to be combated.
I am not sure what the complete answer is here. The ARA/ASPPA/NAPA GAC activities are certainly an extremely important element. We also need to encourage the attorneys who are members to take more public standards on reasonable legal interpretations and not be so willing to cave in to IRS theories/pronouncements/unofficial positions when those are either clearly wrong or based on specious legal reasoning.
There will always be something grey in an area like this. Some of this grey is merely a natural consequence of having to put complex rules and regulations into practice. Those rules are written mostly by individuals who have not had practical experience in the administration or implementation of plans. When grey presents itself, we of course must try to seek appropriate guidance from the IRS. But until there is formal guidance, practitioners should not be afraid of reaching reasonable conclusions on these grey issues in order to proceed on a timely basis with necessary plan operations or documentation. The basis for these conclusions should be well documented so as to be prepared for a challenge in an examination.
NORM: If you were trapped in a room with one other person, who would you want to help you find a way out? A lawyer or an actuary?
SAL: That depends on the room and why I’m trapped there. But I would readily have a drink with either.
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