Get it off my plate! How to Delegate Fiduciary Responsibility

Get it off my plate! How to Delegate Fiduciary Responsibility

| February 21, 2018

Many Plan Sponsors are overwhelmed or unaware of the duties required of them as Plan Fiduciaries. Navigating through mounds of paperwork trying to unscramble what their responsibilities are, what their actual fees are, and how their investment are performing can be disheartening.   

The good news is there are options available for you!   Did you know it was ERISA’S original intent for retirement plans to be ran by experts?  Delegating administration and investment responsibility to outside experts, insulates a Plan Sponsor from both liability and responsibility.   The delegation of administrative and investment fiduciary duties to fiduciaries that accept them in writing can offer REAL VALUE and peace of mind for Plan Sponsors.

Before you can delegate your fiduciary responsibility, you must first be aware of where your plan currently falls on the fiduciary spectrum, and where you would actually like to be (Click Here to read Yes, It’s True – You are a Plan Fiduciary).   

You either retain the Fiduciary Duties or you delegate the fiduciaries duties. Most plans fall in the No Fiduciary Delegation area. 

  • Trustee Directed 401k – This is a single account managed by Trustee for all participants.  Not participant directed. 
  • Participant directedSubject to 404c election, investment decision shifts to participants, but Sponsor retains fiduciary discretion over what’s offered. 
  • Proprietary Insurance or Fund Platform- Sponsor chooses from a menu of proprietary and non-proprietary funds offered by a provider who is prohibited from taking a co-fiduciary role on the plan.  Large insurance companies and Mutual Fund Complexes.   May be assisted by a non –fiduciary Advisor giving education but not “recommendations”. 

Plans that contract with an Independent Fiduciary or 3(21) – Co- Fiduciary Advisor: Describes the co-fiduciary role where an Advisor assists in a fiduciary capacity in giving the Plan advice for a [level compensation] fee. Plan Sponsor still exercises fiduciary discretion and functions as a prudent investment expert by approving the fund menu along with the correlative liability. 

Investment Delegation has two basic types. 

  • 3(38) Lite – Limited ERISA 3(38) Plan Sponsor delegates authority IN WRITING to a qualified fiduciary to provide required discretionary asset management decisions for investments in the plan. In this instance the 3(38) would making decisions based upon what is available for them to choose in the platform.  
  • Full 3(38) – Unfettered access to all investment options and be free from constraining outside influences to select whatever options deemed to be prudent.  Real value in retaining an investment manager pursuant to ERISA section 3(38) lies in having a truly independent firm make the same types of decisions that a well-informed plan sponsor would. 

Administrative Fiduciary Delegation 

  • 3(16) – Administrative Fiduciary ERISA 3(16) – Plan Sponsor delegates discretion for critical administrative functions to a name fiduciary who accepts that authority in writing and assumes a correlative liability, being legally bound to performing the primary Administrative Functions and various decisions that directly impact plan compliance.    
  • Discretional Trustee- Sponsor delegates discretionary authority to a single source for the entire array of required services providers.  The Discretionary Trustee has authority to hire and/or replace service providers as needed. 

We invite you to attend the next Printers401k webinar: Hiring Retirement Plan Professionals on February 27th at 1:00pm CST,CLICK TO REGISTER,  
This informative session will cover the various types of investment professionals and administrative providers available for hire, as well as their degrees of fiduciary responsibility. You will also learn the ins and outs of appointing and monitoring these professionals, from conducting a self-assessment to reviewing their performance. 

Note from the editor: The Printers 401k® Success by Design Program is a collaboration of 401(k) specialists who assume specific fiduciary duties for your plan. The solution is designed to fulfill your fiduciary obligations, allowing you to continue serving as the plan sponsor without the liability and responsibility. 

Companies that have participated in the Printers401k program have been able to: 

  • Reduced Risk and Work  
  • Lowered Liability and Plan Costs 
  • Improved Plan Operations and Investments 


ContactJoe Trybula CFP®, CPFA® today at  800.307.0376 or to learn more about the Printers401k® program, or request afree Plan Analysis Report which  provides you with a snapshot of your plan investments, costs and plan operations compared to other plans in the industry. This analysis can reveal strengths and areas of concern along with solutions to improve your retirement plan