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A 3(16) fiduciary is in section (3) of the Employee Retirement Income Security Act of 1974 ("ERISA”) and is a retirement plan provider hired by the retirement plan sponsor or trustee to manage the day-to-day administrative tasks of the employee sponsored retirement plan: 401(k) or 403(b).
The demands of managing the administration of the 401(k) or 403(b) employer sponsored retirement plan can carry a very heavy burden on the HR and Finance departments of your company.
Retirement plan administration requires expertise in government filings (Form 5500, Plan Audits etc.) and staying compliant with the consistently changing rules and regulations with ERISA and the Department of Labor.
For these reasons and many more, retirement plan sponsors choose to hire a 3(16) fiduciary service provider to act as a plan administrator to handle some or all of the administrative work of the 401(k) or 403(b) plan.
The “3(16) fiduciary” describes the retirement plan administrative service providers who agree to take on fiduciary liability for administrative duties for a fee.
The 3(16) is responsible for:
When an employer or plan administrator/trustee hires a 3(16) to take care of the daily activities for the retirement plan, the 3(16) will actively manage the following day-to-day duties:
employee eligibility compliance
Providing plan disclosures to employees and other participants such as former employees
Prepare and distribute statements to employees and former employees
Signing and filing annual 5500 forms (Required for 401(k) and 403(b) plans)
Approving and processing loans and distributions for employees and the plan
Contact Glover Park Wealth today if you are interested in learning more about and hiring a 3(16) Administrative Fiduciary, 3(21) Investment Fiduciary or 3(38) Investment manager.
Our 401(k) retirement plan financial advisors will work with your HR and Finance department to discuss how we can help with the day-to-day tasks of managing your employer sponsored 401(k) or 403(b) retirement plans.