3(16) Fiduciary Service Agreement

A trustee may also engage one or more service providers to perform fiduciary functions and draw up the contract in such a way that the natural or legal person then assumes responsibility for the selected functions. If an employer appoints an investment manager that is a registered bank, insurance company or investment advisor, the employer is responsible for selecting the manager, but is not responsible for the manager`s individual investment decisions. However, an employer is required to regularly monitor the manager to ensure that he or she treats plan investments prudently and in accordance with the appointment. But what does this mean? What is the role of the plan administrator 3(16)? Let`s dig a little deeper. The role of a plan administrator 3(16) is very different from that of a third-party administrator (TPA). APTs do not assume any fiduciary responsibility. In addition, they are not responsible for the duties required of a plan administrator 3(16). The highest level of plan management 3 (16) occurs when the service provider acts as a plan sponsor and assumes fiduciary responsibility and all actions for which the plan sponsor would normally be responsible in administering the plan. WHEREAS the FTE accepts the appointment of the designated trustee as plan administrator and accepts the fiduciary responsibility described in subsection 3(16) of the Employee Retirement Income Security Act, 1974, as amended („ERISA“), to perform the functions set out herein. However, it appears that subsection 3(16) does the same. Each supplier has a different checklist of the items they fill out (here`s ours).

Some can simply sign Form 5500 and send notifications. Others can perform almost any administrative task associated with the plan. In addition, the services of a trustee 3 (16) do not extend to investment management. ERISA describes the investment-based roles related to a 401(k) plan, commonly referred to as Trustees 3 (21) and 3 (38). A cargo of retirement workEven when you discuss it with them, business owners may not realize how many tasks are required of them when offering a retirement plan, but there are plenty of them. A good 3(16) trustee can take over this administrative work for plan sponsors. Not applicable. The FTE does not provide services to the Plan in connection with the selection, maintenance or modification of its investment options. (H) The Plan Sponsor and the Designated Trustee each acknowledge and agree that the FTE or one of its affiliates may take steps to perform its duties with respect to other EFA clients (including those who may have pension plans similar to the Plan) that may differ from the timing and nature of the actions taken with respect to the Plan.

Nothing in the Agreement shall be construed as imposing an obligation on EFA or any of its affiliates to take or prevent measures under the Agreement in the same manner as for any of its other customers. With these fiduciary responsibilities, there is also potential liability. Trustees who fail to meet basic standards of conduct may be held personally liable for recovering plan losses or restoring profits made by misuse of their assets as a result of their actions. 1 www.forbes.com/sites/forbesfinancecouncil/2018/03/05/benefits-of-adding-338-and-316-fiduciary-protection-to-your-erisa-401k403b-retirement-plan/#723e30de1a78 Enhanced Communications What secretly sabotages pension plans? Payroll dataThe quality of a supplier`s work 3(16) is important because they are essentially responsible for meeting the plan. Your job is to keep retirement planning free of errors. But how can a fiduciary keep a plan flawless? Where do planning errors come from? 10. Receipt of Disclosure. Prior to entering into the agreement, the plan sponsor and the designated trustee review and review the information provided by the EPT (including the agreement), in particular the summary of compensation disclosures in Schedule C and the portions of the agreement relating to fiduciary services, compensation, transactional interests and potential conflicts of interest, and other disclosures relating to, among other things, general information. such as education and business history, business practices such as the type of services provided, etc.