Fiduciary Outsourcing

In such engagements, the extent to which plan fiduciaries may be shielded from prospective liability is determined by the scope of authority delegated. The most common types of professional outsourced fiduciary engagements fall into one of three categories:

Roles & Responsibilities Overview

Administrative Oversight

General Services:

Plan design consulting
Plan document interpretation
Fidelity bond procurement & review
Compliance testing assistance
Form 5500 Processing
Audit support (if applicable)

Reporting Services:

Summary Plan Description (SPD)
Annual QDIA Notice
Annual 404(a)(5) Notice
Summary Annual Report (SAR)
Annual Safe Harbor Notice (if applicable)
Annual EACA/QACA notice (if applicable)

Investment Oversight

3(21) Fiduciary Consultant

Non-discretionary Investment Consultant
Evaluates permissible investment alternatives
Recommends suitable investment options
Quarterly investment tracking & reporting

3(38) Fiduciary Advisor

Discretionary Investment Manager
Evaluate permissible investment alternatives
Manages plan's investment options
Quarterly investment monitoring report

Outsourced Fiduciary Engagements

3(16) Fiduciary Administrator

The designated 3(16) Plan Administrator performs as an appointed fiduciary, who exercises discretionary authority around the routine management of the Plan, in conformance with the applicable Plan Documents.

Outsourced plan management:

Distribute mandatory employee notices
Manage employee deferral elections
Manage beneficiary designations
Process loan & distribution requests

Manage plan compliance:

Monitor deferral remittance
Perform annual non-discrimination testing
Prepare & file required annual tax filings

3(21) Fiduciary Advisor

An Investment Consultant is generally deemed to be a co-fiduciary, who performs in a non-discretionary advisory role. An Investment Consultant appointed under section 3(21) of ERISA generally provides information and guidance around investment evaluation and selection to aide the Plan Trustee(s) in making decisions for the Plan.

Deliverables:

Drafts Investment Policy Statement for approval
Provides information on available investment alternatives for review
Recommends Investment Options for Trustee approval
Monitors the Plan Trustee-designated Investment Options
Prepares & delivers quarterly investment monitoring reports

3(38) Fiduciary Manager

The Plan's designated "Investment Manager" performs as an appointed fiduciary, who exercises discretionary authority around the initial evaluation of investment alternatives and selection of the Plan's Investment Options. A Investment Manager appointed under section 3(21) of ERISA generally provides a fiduciary indemnification and is responsible to maintain ERISA Fidelity Bond for every Client-Plan.