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Fiduciary Support Services

An employer that provides a 401(k) or other retirement plan to their employees can appoint experts as fiduciaries to assist them and to limit their fiduciary risk.  It is becoming increasingly common for employers to appoint fiduciary experts that provide investment advice (limited scope Section 3(21) fiduciaries) or fiduciary experts that assume full  responsibility for managing the plan’s investments (Section 3(38) fiduciaries).  These expert fiduciaries deal with investments, but what about all of the other fiduciary responsibilities that are required to operate a 401(k) plan?


The “Named Plan Administrator” is responsible for operating the plan according to all ERISA (Employee Retirement Income Security Act of 1974) and internal Revenue Code provisions.  The named plan administrator, sometimes called a Section 3(16) fiduciary, is responsible for keeping the plan’s legal documents current, allocating contributions correctly and on a timely basis, processing loans and distributions, insuring that the plan satisfies all of the required annual non-discrimination tests, preparing the plan’s financial statements, filing the appropriate forms with the IRS and DOL and a myriad of other functions.


Many employers believe that their investment provider and/or third party administrator are providing these functions, however almost all service provider contracts specify that the service provider is not acting as a fiduciary.  The employer or named plan administrator is the fiduciary and retains all of the responsibility and liability of fulfilling these functions.  Unfortunately, many plan employers don’t have the knowledge or resources to effectively manage and monitor these responsibilities.


One way to manage these functions is to engage a fiduciary services organization (FSO) that will act as the named plan administrator and Section 3(16) fiduciary.  These fiduciary services organizations are “prudent experts” and can provide the knowledge and guidance to ensure that the plan is operating according to the laws and regulations of the IRS and DOL.  Pinnacle Financial Services works with FSO’s to provide a complete, integrated solution for retirement plan sponsors .



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If you would like to learn more about what this all means to your organization and ways that you can protect your business from related liabilities please provide your name and email address below.  A knowledgeable representative will be in contact to provide you with additional information:

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