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Article<\/h6>\n

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Understanding the Services of a 3(16) Fiduciary<\/h2>\n

The services of an entity or person who accepts the full fiduciary responsibility for an employee benefit plan under Section 3(16) of the Employee Retirement Income Security Act (“ERISA”), which we’ll a “3(16) Fiduciary” for this article, are vital for ensuring compliance and efficient management of employee benefit plans. ERISA sets standards for retirement, pension, and health plans to protect individuals enrolled in these plans. The role of an independent 3(16) Fiduciary is significant in fulfilling the responsibilities associated with managing these plans.<\/b><\/p>\n

What is an Independent ERISA Section 3(16) Fiduciary?<\/h2>\n

A 3(16) Fiduciary is first and foremost free of any conflicts of interest with the retirement plan it serves. Such conflicts can arise in several ways and should be thoroughly vetted by the plan sponsor before hiring a vendor in this category.<\/b><\/p>\n

Section 3(16) of ERISA permits the assignment of specific functions to a third-party. By appointing an independent fiduciary, plan sponsors can delegate certain administrative duties and mitigate their own fiduciary liability.<\/b><\/p>\n

Key Services Provided by a 3(16) Fiduciary<\/h2>\n

The services offered by a 3(16) fiduciary can be comprehensive and crucial for plan management. Some of the key services include:<\/b><\/p>\n

\nPlan Administration:<\/b> A 3(16) Fiduciary assumes the responsibility for plan administration, including supervision of the recordkeeper, tracking all service providers’ performance and data security, participant communications, and compliance with reporting and disclosure requirements.<\/ul>\n

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\nDecision-Making Authority:<\/b> The fiduciary may have the authority to make decisions and take actions on behalf of the plan, such as determining eligibility, calculating benefits, and approving distributions.<\/ul>\n

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\nFiduciary Oversight:<\/b> That involves monitoring and assessing the performance of service providers, investment options, and the overall management of the plan to ensure compliance with ERISA standards.<\/ul>\n

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\nCompliance and Reporting:<\/b> The 3(16 ) Fiduciary ensures that the plan complies with ERISA regulations, including filing necessary reports and disclosures with government agencies and providing required information to participants.<\/ul>\n

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\nRisk Mitigation:<\/b> By assuming certain fiduciary responsibilities, an independent fiduciary can help mitigate the risk of fiduciary liability for plan sponsors.<\/ul>\n

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\nLegal and Regulatory Expertise:<\/b> An independent 3(16) Fiduciary is expected to have a deep understanding of ERISA regulations and other relevant laws, providing valuable expertise in plan management.<\/ul>\n

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Download the “ERISA 3(16) Services”
\n white paper from Roland|Criss<\/a><\/u><\/span><\/h2>\n

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Benefits of a 3(16) Fiduciary<\/h2>\n

There are several benefits associated with engaging an independent 3(16) Fiduciary, including:<\/b><\/p>\n

\nReduced Liability:<\/b> By delegating specific fiduciary functions to an authentic independent 3(16) Fiduciary, plan sponsors can reduce their own fiduciary liability and focus on other aspects of plan management.<\/ul>\n

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\nExpertise and Specialization:<\/b> Independent 3(16) Fiduciaries bring specialized expertise in ERISA compliance and plan administration, offering valuable insights and experience.<\/ul>\n

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\nEfficiency and Compliance:<\/b> Outsourcing fiduciary functions to a dedicated entity can lead to more efficient plan administration and enhanced compliance with ERISA requirements.<\/ul>\n

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\nEnhanced Participant Protection:<\/b> The oversight and decision-making provided by an independent fiduciary can contribute to improved protection for plan participants and beneficiaries.<\/ul>\n

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Summary<\/h2>\n

In conclusion, a 3(16) Fiduciary plays a critical role in the management and administration of employee benefit plans. By assuming specific responsibilities, these entities help plan sponsors navigate the complex landscape of ERISA compliance, mitigate fiduciary risk, and ensure the efficient operation of benefit plans for the ultimate relief of plan participants.<\/b>
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By appointing an independent 3(16) fiduciary, plan sponsors can delegate certain administrative duties and mitigate their own fiduciary liability..<\/strong>\t\t<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"

Practical Tip<\/h6>\r\nTo meet emerging cybersecurity standards as plan sponsors, employers need to understand some basic rules, specifically the Employee Retirement Income Security Act (\"ERISA\").<\/strong>\r\n\r\nThe U.S. Department of Labor (\"DOL\") is developing cybersecurity objectives for plan fiduciaries that form the basis for its plan audits. It's likely that the DOL's guidelines will add to the foundation on which data security related class action lawsuits are litigated.<\/strong>\r\n\r\n\r\nCybersecurity for benefit plans often falls outside the scope\r\nof cybersecurity planning for enterprisess at large.<\/strong><\/em>\r\n\u00a0\r\n\u00a0\r\nBenefit plans often maintain and share sensitive employee data and asset information across multiple unrelated entities as a part of the benefit plan administration process. This data and asset information should be specifically considered when implementing cybersecurity risk management measures.<\/strong>\r\n\r\nBecause benefit plans are regulated by ERISA, anyone who interacts with the plan should be particularly aware of the impact that breaches have on participants and beneficiaries and the associated rights and duties of plan fiduciaries arising under ERISA.<\/strong>\r\n\r\nEveryone who comes in contact with personally identifiable information (\u201cPII\u201d) has a role to play in protecting plan data.<\/strong>\r\n\r\nHere's where to start...<\/strong>\r\n\u00a0\r\n

\r\n

Adopt a Cybersecurity Policy<\/h2>\r\nRegardless of a plan's size or complexity, the need for a cybersecurity policy statement<\/em> (\"CPS\") has escalated to the same level of importance as an investment policy statement. If your plan currently lacks a CPS, don't delay in adding one to the policies on which you rely to demonstrate that your plan is being managed prudently.<\/strong>\r\n

Conduct a Cybersecurity Risk Assessment<\/h2>\r\nInitiate an examination of your plan's current cybersecurity sensitivities, resourced either internally or by a qualified third-party expert. A legally defensible risk assessment will adhere to 18 discovery tasks. Scored on a scale of 1 to 100, an assessment offers a way to ensure continued improvement. Ask Roland|Criss for a list<\/em><\/a>.<\/strong>\r\n\r\n

Elevate Cybersecurity to a High Monitoring Priority<\/h2>\r\nThe agendas of benefit plan related committees should include a permanent entry for monitoring a security management plan<\/em>. Best practices for ERISA governance, risk management, and compliance (\"GRC\") systems now require evidence of robust monitoring. Using a technology application tailored for that purpose is a must. Ask us about FiduciaryGRC<\/a>^{\u2122<\/sup>, a state of the art cybersecurity solution that covers the entire risk spectrum; assessment, technology, and monitoring.<\/strong>\r\n\r\nFiduciaryGRC\u2122<\/sup> is a trademark of Roland|Criss.<\/span>","_et_gb_content_width":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"sync_status":"","episode_type":"","audio_file":"","castos_file_data":"","podmotor_file_id":"","cover_image":"","cover_image_id":"","duration":"","filesize":"","filesize_raw":"","date_recorded":"","explicit":"","block":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-40362","post","type-post","status-publish","format-standard","hentry","category-retirement-plans"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/posts\/40362","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/comments?post=40362"}],"version-history":[{"count":24,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/posts\/40362\/revisions"}],"predecessor-version":[{"id":40428,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/posts\/40362\/revisions\/40428"}],"wp:attachment":[{"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/media?parent=40362"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/categories?post=40362"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rolandcriss.com\/wp-json\/wp\/v2\/tags?post=40362"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}}