"A decision to hire a 3(16) fiduciary should be made prudently and solely in the interest of plan participants. As part of its decision-making process, it is important for the plan sponsor to establish and follow a procedure that satisfies the requirements of ERISA. According to the DOL, the plan sponsor must engage in an "objective process" designed to elicit the information necessary to evaluate the following three criteria:
(1) the qualifications of the service provider,
(2) the quality of services provided, and
(3) the reasonableness of the provider's fees in light of the services provided".
DOL Advisory Opinion 2002-08A. See also DOL Field Assistance Bulletin 2002-3
The term "ERISA 3(16)" is derived from Section 3(16) of ERISA, which defines the term "administrator" as one who is so designated by the plan document. If the plan document does not designate a plan administrator, the responsibilities fall squarely on the shoulders of the plan sponsor (also known as the "employer").
Certain responsibilities of the ERISA 3(16) are fiduciary in nature, while others are ministerial (non-fiduciary). The ministerial responsibilities include:
Examples of administrative tasks involving the exercise of discretion and control include:
Plan Management and Administration
Operation of the Plan
The following are likely candidates who should consider hiring ERISA Wise, LLC as the ERISA 3(16) for their tax qualified plan:
ERISA Wise, LLC is not a Third Party Administrator.
ERISA Wise, LLC is a fiduciary service for employer-sponsored retirement plans.
ERISA Wise, LLC is independent of any insurance or investment firm.