By having BFF® serve as your 3(16) Fiduciary Administrator, plan sponsors will typically save time, money and substantially reduce their fiduciary risk.
When plan sponsors consider their ongoing fiduciary obligations, too many focus the majority of their attention on the 401(k) plan’s investment aspects. However, there are also a significant number of administrative responsibilities – from ensuring that participant notices are sent to taking corrective actions based on testing results. In fact, proper administration is the most important cog in the retirement plan machine because this is what ensures that your retirement plan remains “qualified” under the Internal Revenue Code thereby preserving the tax deferral status of the contributions made for the retirement of plan participants.
Invariably, when the employer is busy running the day-to-day operations of their 401(k) plan, these additional administrative responsibilities can sneak up on them and significantly add to the workload. Neglecting a required task can have substantial negative consequences so it’s important to understand the risks and how selecting BFF® to shoulder the majority of your fiduciary administrative responsibilities can help you and your 401(k) plan.
To help plan sponsors fulfill their fiduciary obligations, BFF® can act as a “delegated administrative fiduciary” for certain key plan administrative responsibilities under ERISA § 3(16). This can typically include:
- Coordinating plan vendor resources and resolving service and administrative issues
- Managing the approval process for participant loans, withdrawals and hardship withdrawals
- Managing the approval process for Qualified Domestic Relations Orders (QDROs)
- Eligibility determination and notification
- Ensuring the required participant notices, statements and plan disclosures are sent
- Reviewing compliance testing and signing the 5500s
- Preparing an annual Fiduciary Statement of Plan Management® or FSPM®
- Maintenance of your Fiduciary Document Vault
Having your own BFF® will give you back hours of valuable employee time each month, allowing you to redirect their attention back to growing your business. Additionally, plan sponsors substantially reduce their own fiduciary risk when BFF® serves as your “delegated” ERISA 3(16) Fiduciary Administrator because the proper administration of your 410(k) plan is our responsibility.
For more information on how BFF® can serve as your 3(16) Administrative Fiduciary, please contact us.