As businesses of all sizes explore providing high quality retirement plans as a differentiating factor to attract, secure and retain talent, many plan sponsors are in the dark about their responsibilities associated with offering such plans and how to protect themselves from the associated financial risks. Many plan sponsors ask themselves “What is a 3(16) Administrative Fiduciary and how can I protect myself by outsourcing this function”?
What is 3(16) Administrative Fiduciary?
Relieving many of the burdensome day-to-day administrative duties associated with sponsoring a plan, 3(16) administrative fiduciary services typically include: being named as the plan administrator in the plan document, reviewing and approving distributions from the plan, monitoring and benchmarking plan fees, making certain mandatory disclosures are made properly and maintaining plan compliance in accordance with ERISA, IRS, DOL and other government agency laws.
Unless an employer outsources or assigns these duties, the plan sponsor is the 3(16) administrative fiduciary responsible for the oversight of the retirement plan. However, the plan sponsor may delegate their administrative responsibilities to a professional service firm. By engaging a 3(16) administrative fiduciary, like NPPG, plan sponsors can mitigate risk, reduce administrative burden and save time, money and resources.
Why Do I Need 3(16) Administrative Fiduciary?
In-depth knowledge and expertise, saving time to focus on their business and liability protection are among the biggest factors many plan sponsors consider when they begin their research on, what is 3(16) administrative fiduciary. By specifically addressing each of these concerns head on, a 3(16) administrative fiduciary reduces the labor burden and liability associated with a 401(k) plan in an efficient and cost-effective manner.
It’s clear that managing the intricacies of a company-wide retirement program can be burdensome, costly, and time-consuming. In addition, because retirement plans are heavily regulated, one mistake could result in non-compliance and substantial fines and penalties and potential litigation costs affecting both for-profit and nonprofit organizations. In a 3(16) administrative fiduciary relationship, the plan sponsor outsources these vital responsibilities (and risks involved), shifting most of the liability to the professional outsourced ERISA 3(16) administrative fiduciary to mitigate the corporate and personal risk to the employer.
Without a 3(16) administrative fiduciary like NPPG, the plan sponsor retains all labor burden and corporate and personal liability associated with their duty as the Plan Administrator.
Financial Advisors, CPA’s, Recordkeepers and Third Party Administrators (TPAs) have recognized the growing interest from clients on delegating duties to a third party professional and are advising clients on how to reduce their corporate and personal liability by outsourcing most of their fiduciary responsibility to a 3(16) administrative fiduciary. As an ERISA 3(16) administrative fiduciary, NPPG has expanded upon its partnerships with leading retirement plan professionals to enhance their suite of services to offer a comprehensive fiduciary solution to their clients.
Regardless of who is providing the recordkeeping or TPA service, retaining a 3(16) administrative fiduciary can be a stand-alone service that a plan sponsor can designate to mitigate fiduciary risk and reduce administrative burden. As the ERISA 3(16) Plan Administrator, NPPG Fiduciary Services takes on a majority of the fiduciary liability to any respective retirement plan, regardless of whether or not NPPG is the Third-Party Administrator (TPA).
NPPG 3(16) Administrative Fiduciary Services, LLC (NPPG-FS)
By offering flexible and comprehensive 3(16) administrative fiduciary support, NPPG Fiduciary Services is held to higher standards: placing the interests of each of our clients and plan participants before all others, including our own. We are your trusted partner dedicated to helping you improve business performance and financial results.
For many years plan sponsors, Financial Advisors, CPA’s, Recordkeepers and TPAs have been turning to NPPG-FS for guidance on their most intricate retirement plan needs.
NPPG is an independent ERISA fiduciary, full-service employee benefits, retirement planning, and actuarial consulting firm. NPPG handles more than $3 billion in assets and more than 2,000 plans for clients nationwide. A full suite of compliance services, include Affordable Care Act (ACA), ERISA 3(16) administrative fiduciary services, retirement plan third party administration, as well as overall regulatory consulting and plan correction. NPPG customizes solutions to meet business and financial goals of their clients. NPPG clientele is made up of members of the New York stock exchange and NASDAQ, non-profit organizations, Fortune 500 companies, government agencies, as well as small entrepreneurial businesses.
For further information, contact Northeast Professional Planning Group, Inc. corporate office in Red Bank, NJ at (732) 758-1577.