“The duty to act prudently is one of a fiduciary’s central responsibilities under ERISA. It requires expertise in a variety of areas, such as investments, administration and regulations. Lacking that expertise, a fiduciary will want to hire someone with that professional knowledge to carry out the investment and other functions.” – U.S. DOL
The ERISA Smart 3(16) Back Office Solution
ERISA is a complex set of Federal regulations. Failure to follow these regulations can have dire consequences. The DOL and IRS can levy fines, penalties, bar a person from serving as a fiduciary and in some circumstances, bring criminal charges. In a recent study of 551 plan sponsors, it was determined that 87% responded that they have never had ERISA Fiduciary education but, where willing to take on the responsibility of making decisions and operating a retirement plan. Hiring a 3(16) administrative fiduciary will allow a plan sponsor to focus more on their business and shift their liability of managing the plan to a team of ERISA experts.
The Creation of ERISA SMART 3(16) Administrative Fiduciary Services
What Should a Plan Sponsor look for in a 3(16) Administrative Fiduciary?
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ERISA SMART 3(16) Administrative Fiduciary Services was born from a void in the retirement plan market place. While at the U.S. Department of Labor (DOL), David Donaldson, President of ERISA SMART noticed that most of violations cited by the department where caused by the lack of education and omissions of plan sponsors. It is no surprise that year over year the DOL finds violations of ERISA in approximately 70% of the plans they investigate. After leaving the department David created a compliance software called the ERISA SMART Plan Manager ™. This software was originally built so plan sponsors could have a better system to manage their plan. After the beta test, it became apparent that most plan sponsors were too busy running their company and had minimal time to focus on fulfilling their fiduciary duties. It was at that time that ERISA SMART decided to internalize the software and use it to power a 3(16) administrative fiduciary service.
A plan Sponsor should find a 3(16) administrative fiduciary that is independent of any other services provided to the plan. This independence allows the 3(16) administrative fiduciary to be objective, avoid any potential conflicts and work in the best interest of the plan. ERISA SMART is not a TPA, Recordkeeper or Financial Advisor. We are not conflicted in any capacity.
Why Hire a 3(16) Administrative Fiduciary?
"Raising the Bar in Retirement Plan Management
Creating a 3(16) service can be a time-consuming and cumbersome undertaking requiring a high level of expertise and experience in the defined contribution market. Through our proprietary software, the ERISA SMART Plan Manager, we can provide the back office support to your own 3(16) fiduciary outsourcing solution. ERISA SMART has developed a turnkey solution that can fit any size TPA or recordkeeper. This includes all marketing collateral, business development leads, webinars, legal contracts & agreements.
For Plan Sponsors ERISA SMART can provide 3(16) Services on most bundled platforms. Contact us or your financial advisor for more information.