You have an Attorney, CPA and Financial Advisor…are you looking for ERISA 3(16) Fiduciary Services to complement your team of business professionals?
Business owners understand the relationship and reasons for partnering with an Attorney, CPA and Financial Advisor. These partnerships allow the business owner to focus on their line of business while leaving legal, accounting and financial concerns in the hands of their advisors. Even with this suite of professionals the business owner still maintains sole fiduciary liability overseeing the administration, plan management and decisions of their retirement plan. To ensure they reduce corporate and personal liability for fiduciary responsibilities, prudent business owners align themselves with NPPG Fiduciary Services (NPPGFS) as their ERISA 3(16) Plan Administrator.
NPPGFS competently navigates the complex fiduciary landscape for you, mitigating the business owner’s personal fiduciary responsibility associated with their corporate retirement plan.
Whether large or small, employers that provide a retirement plan to their employees have a fiduciary responsibility to keep the plan compliant with the Employee Retirement Income Security Act (ERISA). Most Plan Sponsors (employers), as well as plan committees, human resource professionals, officers and directors are aware of this fiduciary responsibility. What is unclear to most, about their fiduciary role, is their own personal liability to restore any losses to the plan if the basic standards of conduct set forth by ERISA are not followed.
Appointing NPPG Fiduciary Services (NPPGFS) as your ERISA 3(16) Plan Administrator will alleviate not only the labor burden associated with the day to day administration but also much of the liability inherent in your corporate retirement plan. Partnering with NPPGFS for ERISA 3(16) Fiduciary Services allows you to utilize your expertise to focus on your business, while we focus our expertise on the fiduciary compliance and administration of your plan such as: signing your Form 5500, executing loans and distributions, determining participant eligibility and much more.
Under ERISA 3(16) the Plan Administrator is the fiduciary specifically named in the plan document that is responsible for handling all plan operations. When NPPGFS is appointed as our client’s ERISA 3(16) Plan Administrator, we will competently manage the oversight of the daily plan operations as well as take on a significant portion of the fiduciary liability enabling the business owner to focus on their company and its future.
Reasons Employers should hire an ERISA 3(16) Plan Administrator
- They lack the time and expertise to ensure that all of the administrative functions for the retirement plan are carried out correctly
- Most employers operate with lean in-house staff and need to be confident that the plan is being administered correctly
- Employers need to minimize fiduciary liability exposure which can be exorbitant
- Most employers with staff do not have the ERISA expertise needed to administer plans
- Employers who have newer employees working on the plan are still learning about ERISA requirements
At National Professional Planning Group (NPPG), we recognize the intricacies and complexities of retirement plan management and the encompassing fiduciary responsibilities. The average NPPG professional has at least 15 years of experience. As a result of NPPG’s commitment to continuing education and our rigorous professional standards, we have great expertise in the nuances of both ERISA fiduciary and government regulatory requirements. When our clients have appointed us as their ERISA 3(16) plan administrator, we take on the majority of the fiduciary risk enabling the plan sponsor to focus on company growth.
Alleviate Fiduciary Risk by Appointing NPPG as your ERISA 3(16) Plan Administrator
Under ERISA 3(16) the plan administrator is the fiduciary specifically named in the plan document. Conversely, if no one is designated, the plan sponsor is the administrator of the plan. The plan administrator is responsible for handling all plan operations such as: providing summary plan descriptions, participant disclosures, approving plan distributions, approving and signing the annual Form 5500 and other important plan duties. Unlike a TPA who prepares the government forms, the plan administrator is held accountable to approve, sign and file the required government forms by specific deadlines. If these ERISA obligations are not met, the plan administrator could be subject to fines and possible legal action from plan participants.
In the role of the appointed ERISA 3(16) plan administrator, NPPG will competently manage the oversight of the daily plan responsibilities such as reasonableness of vendor compensation under 408(b)(2), providing summary plan descriptions, complying with participant disclosures under 404(a)(5) and 404(c), approving plan Qualified Domestic Relations Orders (QDROs) and other distributions, approving, signing and filing IRS Form 5500, and other responsibilities. If, in the event the plan is assessed a fine or a participant lodges a dispute, NPPG would be responsible to handle all such matters with regard to payment of any fines and legal defense cost. In addition to the strength and experience of NPPG, we confidently maintain errors and omissions insurance through a carrier that is rated Excellent by A.M. Best Company.
The following constitutes the list of obligations of a Plan Administrator and fiduciary, which NPPGFS agrees to undertake when retained by an Employer:
- NPPG Fiduciary Services – A named Plan Administrator in the Plan Document
- Verify accuracy, sign and file the Form 5500 – NPPGFS will review, sign and submit as Plan Administrator to the Department of Labor
- Annually reconcile census data for accuracy
- Review and verify ADP, ACP, Top-Heavy and Non-Discrimination compliance testing for accuracy.
- QDRO determinations. Review and make final determinations on Qualified Domestic Relations Orders as Plan Administrator.
- Authorize benefit payments to participants including corrective distributions.
- Participant loan review and approval.
- Review annual loan reconciliation.
- Approval of mandatory distributions.
- Determination of participant eligibility.
- Provide a documented fiduciary administrative process.
- Review and distribution of mandatory notices.
- Respond to IRS, DOL and litigation inquiries.
- Accept legal process. Service of legal process for a lawsuit related to the Plan can be made upon NPPGFS as Plan Administrator.
- Verify proper spousal consent prior to distributions.
- Review and distribution of Summary Plan Descriptions (SPD’s) and Summary Material Modifications (SMM’s).
- Review and authorize rollovers into plan.
- Determination of participant disability.
- Preparation of enrollment packages for newly eligible participants.
- Notification to payroll vendor of appropriate level of elective deferrals.
- Fulfill document request from plan participants.
- Determination of special valuation date. (Pooled/balance forward accounts only).
- Review compensation used for Plan purposes, elective deferral calculations, and employer provided contribution calculations.
- Maintain Fidelity Bond on behalf of the Plan, to meet the ERISA Section 412 Requirement.
- Monitoring duties. NPPGFS will provide the following monitoring services on behalf of the Plan Sponsor, excluding Self-Directed Brokerage Accounts:
- 404a-5 participant disclosures and 404(c)compliance
- Blackout periods
- Regularly benchmark the reasonableness of vendor fees and services under 408(b)(2) including: Record-keeper, 3(21) / 3(38) Investment Fiduciary, Financial Advisor, Auditor and TPA.
- Loan/distribution verification with participant.
- Control and Affiliated Service Group Review.
*This list is not inclusive of all plan administrative responsibilities.
The decision to appoint a 3(16) fiduciary does not negate the plan sponsor of all fiduciary responsibilities. The plan sponsor can be held accountable for the hiring of a service provider such as in the appointment of a 3(16) fiduciary. Performing due diligence in the selection of a service provider will enable the plan sponsor to evaluate and compare provider services to ensure a sound decision for the plan and its participants.
About National Professional Planning Group, Inc. and NPPG Fiduciary Services, LLC
National Professional Planning Group, Inc. is a leading national employee benefits, retirement planning and actuarial consulting firm. ERISA 3(16) administrative fiduciary services are offered through NPPG Fiduciary Services, LLC. Investment advisory services are offered through NPPG Plan Professionals, LLC. Insurance services are offered through NPPG and NPPG Employee Benefits, LLC.