What is 3(16) Fiduciary?
ERISA Section 3(16) provides for a fiduciary* who is appointed and accepts fiduciary responsibility for certain otherwise administrative functions for the Plan.
Some of the duties and responsibilities of a 3(16) fiduciary may include:
Filing Form 5500
Monitoring plan operations
Establishing ‘Best Practices’ and monitoring their execution
Supervising the distribution of annual notices
Preparing the Controls and Reporting Package
Approving Financial Hardships and loan requests
Best Practices implemented by QBI Fiduciary Administration 3(16) fiduciary, include:
- Review of Plan Document (update, restatement, execution) and Procedures and coordination with Employee Handbook
- Procedures for distribution of Summary Plan Description and Plan Notices, including 404(c) Notice
- Authorizing Financial Hardship distributions and Plan Loans and Rollovers
- Oversight of appointment of required Plan functionaries and other fiduciaries, such as Plan Trustee, Plan Committee
- Review of key government audit “trigger points” such as implementation of the correct definition of compensation; timely deposit of plan contributions; use of valid eligibility and plan entry dates
- Review of Record keeper stored plan provisions, timely investment of contributions received, processes for researching defective participant address information
- Review of timely testing procedures and responses to failed tests, audit, fiduciary bond and completion and filing of the 5500.
- Providing a Fiduciary Administration Controls and Reporting detailed summary at each Plan Year end.
*A fiduciary must act solely in the best interests and for the exclusive benefit of plan participants and beneficiaries. A fiduciary must comply with all plan documents and all applicable federal and state laws and regulations. This mandates familiarity with these documents and laws. A fiduciary has a duty to seek the advice of experts and must act with the care, skill and diligence that would be exercised by a reasonably prudent expert.
The Plan Sponsor retains certain responsibilities, including oversight of QBI Fiduciary Administration and the Plan’s other Service Providers and fiduciaries. QBI Fiduciary Administration responsibilities do not include the monitoring of Plan investments or the pricing of investment or recordkeeping packages chosen for the Plan. QBI Fiduciary Administration's services, pricing and terms of operation are governed by the Engagement Agreement executed for each specific Plan.