Source: Fred Reish and Bruce Ashton, Partners with Drinker, Biddle & Reath, LLP. Recognized as two of the leading ERISA attorneys in the U.S
According to the Internal Revenue Services (IRS), the majority of plan violations seen on audit involve the administrative functions of the named Fiduciaries. There has never been more regulatory pressure than there is today for employers to properly address fiduciary responsibilities and proper plan administration. Increased regulatory compliance and audit risk in recent years are creating significant complexity for employers
Don't believe things have changed?
Consider the following:
• 2008 - U.S. Supreme Court changed the legal basis for litigating 401(k) plans, allowing individuals to seek damages against plan sponsors.
• 2009 - The Department of Labor added 1,000 audit enforcement agents, a nearly 10-fold increase in the number of agents auditing 401(k) retirement plans.
• 2010 - DOL's enforcement division created the Contributory Plans Criminal Project (CPCP), which is the agency's first national criminal enforcement project.
• 2012 - The fee disclosure rules, also know as the 408(b)(2) regulations, took effect requiring Plan Sponsors to take a more active oversight role of plan fees and expenses.
The Plan Administrator, as defined in ERISA Section 3(16), is responsible for many of the day-to-day functions of the plan. Some such functions would be to ensure all required filings with the federal government are made in a timely manner and the administration of loans and distributions.
EJReynolds, in the capacity of Third Party Administrator, will normally perform certain ministerial functions for the plan that are not considered fiduciary duties:
Plan Sponsors may engage EJReynolds in a more advanced capacity if they feel uncomfortable in taking on the liability of performing these functions, or do not have sufficient staff or whose expertise falls outside of ERISA principles. EJReynolds provides the strength and commitment of an independent organization with more than 30 years of experience servicing retirement Plan Sponsors and their Participants.
For Plan Sponsors who would prefer a more “hands off” approach, the EASE Program allows us to perform our normal duties as well as many functions that would traditionally be the Sponsor’s responsibility, including:
For more information ERISA 3(16) Services (EASE) Contact us today