Question: We are considering outsourcing some of our ERISA 3(16) administrative fiduciary responsibilities. What are some things to keep in mind?
Answer: Many plan sponsors already outsource administrative duties to their recordkeeper (such as hardship approvals and preparation of 5500 forms) in a nonfiduciary capacity. Some are now looking to outsource not only the work, but also the fiduciary discretion or control, to minimize workloads and/or reduce ERISA liability. Given the scope of responsibilities, a provider’s technological capabilities and knowledge, skill and experience with plan administration is very important. Connectivity to the recordkeeper (when the 3(16) fiduciary is unrelated) also matters to ensure a quality service experience for plan participants. To further explore governance models that delegate some level of fiduciary responsibility to external providers, check out “Defined Contribution Plan Governance Models: A Guide for Plan Sponsors,” published by the Defined Contribution Institutional Investment Association). You can also view the guide at: https://tinyurl.com/bdzankwj.
TRA is thrilled to introduce a game-changing enhancement to our fiduciary services lineup! Designed with our valued clients in mind, this enhancement offers even greater flexibility to meet diverse needs and preferences of plan sponsors.
Introducing our two stellar fiduciary service options!
- 3(16) Core Fiduciary Services: A brand-new version catering to plan sponsors seeking support exclusively for Form 5500 filings and distribution processing.
- 3(16) Enhanced Fiduciary Services: Perfect for plan sponsors desiring our comprehensive range of fiduciary services.
With this dual-service approach, we empower plan sponsors to choose the model aligning best with their financial goals and servicing preferences. Elevate your fiduciary experience with TRA!