There are many responsibilities for a plan administrator and/or fiduciary of an organization’s retirement plan. You are in charge of all the behind-the-scene actions of the retirement plan at your company, ensuring the company’s actions and the plan itself are compliant, and that participants are taking full advantage of the plan available to them. That sounds like quite the role, but what details does it entail? This post will give you a high-level overview of the daily responsibilities of a plan administrator and or fiduciary, so you know the purpose and importance of the role.
First things first, what’s the difference between a plan administrator and a fiduciary? A plan administrator is responsible for managing a company’s retirement plan, this can be done in-house but is often outsourced to a third party. Fiduciaries are those who exercise control over the retirement plan or its assets, this includes but is not limited to plan design and investment decisions of a company’s retirement plan. The plan administrator, which often is a recordkeeper or separate third-party administrator, helps keep the retirement plan running in accordance with the department of labor regulations (DOL).
Now that we have the differences covered, let’s start with the day-to-day basics of a plan administrator. Responsibilities can always vary depending on the company, but typically plan administrators perform the following:
- Communicate retirement plan updates and benefits of the retirement plan to plan participants
- Send appropriate disclosures and notices to plan participants
- Ensure the plan is following stated regulations and remains compliant
- Support any auditing efforts if required (depending on plan size)
- Complete any required plan testing and year-end compliance work
- Ensure plan design features coordinate with the needs of the plan participants
- Approve plan transactions such as loans and distributions
As mentioned above, fiduciaries operate a little differently than plan administrators. Their daily activities can differ based on service agreements, like plan administrators, but often reflect as such:
- Develop written procedures for routine fiduciary decisions, like making sure there is a process for monitoring and evaluating the retirement plan’s investments
- Develop and maintain written procedures for hiring and monitoring service providers (advisors, recordkeepers, third-party administrators (TPA))
- Keeping records of meetings and decisions made
- Collaborating with legal counsel to make sure you are complying with any prohibited but necessary transaction exemptions
- Operating the plan in accordance with the plan documents
- Monitoring, documenting, and benchmarking plan fees to ensure they are fair and reasonable
Needless to say, there is a lot to being a plan administrator or fiduciary. This post shared a high-level illustration of the various tasks that these roles do, but there are many other responsibilities to consider as well. When it comes to implementing and managing a successful retirement plan for your organization, it’s crucial to know that these roles have their bases covered and are aware of the impact they have on the financial well-being of plan participants. If you want to learn more about how we support plan administrators and fiduciaries through our retirement plan advisory services, contact our team.
Curious to see how your retirement plan stacks up to others in the marketplace? BerganKDV’s Retirement Plan Solutions team offers a complimentary competitive analysis that will show how your plan ranks so you can make adjustments to recruit and retain talent. Check it out here.
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