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The Importance of ERISA Plan Administrators

It’s not uncommon for Defined Contribution (DC) plan fiduciaries to be confused about the responsibilities of their retirement plan administrator. However, if you serve in a fiduciary role for your practice’s retirement plan, It’s important to understand all of your providers’ roles and how they will partner to meet the needs of your practice.

Section 3(16) of the Employee Retirement Income Security Act (ERISA) defines a plan administrator as the person designated by the plan, the plan sponsor, or, in the absence of such designation, someone the Secretary of Labor determines.

The individual who signs the annual form 5500 is automatically considered by ERISA to be the plan administrator.

The wide ranging ERISA 3(16) fiduciary responsibilities include, but are not limited to:

  • Interpretation of the plan document
  • Required reporting and disclosures (i.e., Form 5500)
  • Selection, evaluation, and monitoring of other plan fiduciaries, service providers, plan investments, any investment advisor to the plan and reasonableness of all plan fees and contracts
  • Distribution of Summary Plan Description (SPD)/Summary of Material Modifications (SMM), participant fee disclosure, benefit statements, QDIA notices and other required participant disclosures
  • Distribution of benefits
  • Administration of QDROs (procedures and process)
  • Administration of loans

What Partners Should Be Involved with My Practice’s Retirement Plan?

Plan Administrators are required to provide plan participants with the imperative, “need-to-know” facts about their retirement plans, including plan rules, financial information, and the daily operation of the plan. Some of these facts are to be provided regularly to the plan participants, while others may be available upon written request, free-of-charge.

Administrative services can be provided by Section 3(16) fiduciary TPA administrators. Fiduciary investment responsibilities can be shared with 3(21) fiduciary advisors or delegated directly to 3(38) investment advisory firms. Plan fiduciaries always retain responsibility for prudent selection and monitoring of any delegated entity.

The non-fiduciary TPA, however, typically performs purely “ministerial functions” administering and record keeping participant actions assuming little or no fiduciary responsibilities.

When Should I Outsource Fiduciary Responsibility?

The decision to outsource fiduciary responsibilities is a function of how much liability and responsibility plan fiduciaries care to assume.

Clearly, DC plan fiduciaries are tasked by ERISA with substantial responsibility and liability for their performance as plan fiduciaries. The complexity of ERISA law, dramatically increasing litigation, and contradictory court rulings are manifesting in greater awareness and interest in plans outsourcing fiduciary responsibilities and liability to specialty service providers.

What’s Next?

As a fiduciary advisory firm, Curi Capital has worked with many businesses to help them understand the roles of their current retirement plan service providers—and assess their performance.

For additional information about this topic, or to learn what Curi Capital’s team can do for you, please reach out to Caleb Sanderson or Joe Dillon at 984-202-2800.

Curi Wealth Management, LLC, dba Curi Capital (“Curi”), is an investment adviser in Raleigh, NC.  Curi is registered with the Securities & Exchange Commission (“SEC”). Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. Curi only transacts business in states in which it is properly registered or is excluded or exempt from registration. A copy of Curi’s current written disclosure brochure filed with the SEC which discusses among other things, Curi’s business practices, services, and fees, is available through the SEC’s website at