People who exercise control and authority over the management of a retirement plan's assets are fiduciaries. So are professionals who provide investment advice with respect to those assets. As a company owner or executive, in most cases you also play an investment fiduciary role unless you partially or fully outsource that function to an investment professional.
What you may not recognize is that you may likely also wear another important fiduciary hat based on your control and authority over the administration of the plan. The named plan administrator is responsible for many things including:
- Making sure eligibility is determined correctly,
- Making sure that a number of required notices and mailings go out every year,
- and making sure that plan-related payroll is properly processed.
You are also responsible for overseeing the performance of service providers to the plan. As you understand your fiduciary role better, you may find you don't have the knowledge, experience or comfort in performing in this capacity.
That's why some expert third party administration providers and other plan consultants offer ERISA 3(16) services. Under this arrangement, you can outsource the plan fiduciary role and limit your liability and risk, as well as reduce your time and effort in managing the ongoing operations of the plan.
We can introduce you to the opportunity of a 3(16) fiduciary outsourcing relationship.