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News & Press: Finance

Get It off My Plate! How to Delegate Fiduciary Responsibility

Monday, February 26, 2018   (0 Comments)
Posted by: Alyce Ryan
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Printers401K is one of AICC's Money Saving Programs.

Many Plan Sponsors are overwhelmed or unaware of the duties required of them as Plan Fiduciaries. Navigating through mounds of paperwork trying to unscramble what their responsibilities are, what their actual fees are, and how their investment are performing can be disheartening.   

The good news is there are options available for you!   Did you know it was ERISA’S original intent for retirement plans to be ran by experts?  Delegating administration and investment responsibility to outside experts, insulates a Plan Sponsor from both liability and responsibility.   The delegation of administrative and investment fiduciary duties to fiduciaries that accept them in writing can offer REAL VALUE and peace of mind for Plan Sponsors.

Before you can delegate your fiduciary responsibility, you must first be aware of where your plan currently falls on the fiduciary spectrum, and where you would actually like to be (Click Here to read Yes, It’s True – You are a Plan Fiduciary).   

You either retain the Fiduciary Duties or you delegate the fiduciaries duties. Most plans fall in the No Fiduciary Delegation area. 

  • Trustee Directed 401k – This is a single account managed by Trustee for all participants.  Not participant directed. 
  • Participant directedSubject to 404c election, investment decision shifts to participants, but Sponsor retains fiduciary discretion over what’s offered. 
  • Proprietary Insurance or Fund Platform- Sponsor chooses from a menu of proprietary and non-proprietary funds offered by a provider who is prohibited from taking a co-fiduciary role on the plan.  Large insurance companies and Mutual Fund Complexes.   May be assisted by a non –fiduciary Advisor giving education but not “recommendations”. 

Plans that contract with an Independent Fiduciary or 3(21) – Co- Fiduciary Advisor: Describes the co-fiduciary role where an Advisor assists in a fiduciary capacity in giving the Plan advice for a [level compensation] fee. Plan Sponsor still exercises fiduciary discretion and functions as a prudent investment expert by approving the fund menu along with the correlative liability. 

Investment Delegation has two basic types. 

  • 3(38) Lite – Limited ERISA 3(38) Plan Sponsor delegates authority IN WRITING to a qualified fiduciary to provide required discretionary asset management decisions for investments in the plan. In this instance the 3(38) would making decisions based upon what is available for them to choose in the platform.  
  • Full 3(38) – Unfettered access to all investment options and be free from constraining outside influences to select whatever options deemed to be prudent.  Real value in retaining an investment manager pursuant to ERISA section 3(38) lies in having a truly independent firm make the same types of decisions that a well-informed plan sponsor would. 

Administrative Fiduciary Delegation 

  • 3(16) – Administrative Fiduciary ERISA 3(16) – Plan Sponsor delegates discretion for critical administrative functions to a name fiduciary who accepts that authority in writing and assumes a correlative liability, being legally bound to performing the primary Administrative Functions and various decisions that directly impact plan compliance.    
  • Discretional Trustee- Sponsor delegates discretionary authority to a single source for the entire array of required services providers.  The Discretionary Trustee has authority to hire and/or replace service providers as needed. 

We invite you to attend the next Printers401k webinar: Hiring Retirement Plan Professionals on February 27th at 1:00pm CST, CLICK TO REGISTER,  
This informative session will cover the various types of investment professionals and administrative providers available for hire, as well as their degrees of fiduciary responsibility. You will also learn the ins and outs of appointing and monitoring these professionals, from conducting a self-assessment to reviewing their performance.

About Printers 401K

Member Contact:
Joseph P. Trybula

Printers 401k®, has been serving companies in the printing industry since 1985. The Printers 401k® Program is a collaboration of 401(k) specialists who assume specific fiduciary duties for your plan. They have a keen understanding of the concerns and needs these businesses and their employees face, from mitigating fiduciary liability and costs on the plan management side to the investment options and education on the plan participation side.  Their goal is to make it simple and easy for you to maintain a successful retirement plan by providing true fiduciary protection, reduced administration time, outstanding investment options, and cost savings.

The Results of Using Printers 401K Solutions:

  • Reduced Risk and Work
  • Lowered Liability and Plan Costs 
  • Improved Plan Operations and Investments