Seamless Management of Your Retirement Plan
Hire an Independent Fiduciary and Transfer Your Fiduciary Duties
A plan must have at least one fiduciary (a person or entity) named in the written plan‚ or through a process described in the plan‚ as having control over plan operations. The fiduciary may be identified by name or by office; such as‚ an administrative committee or the board of directors.
Fiduciaries often hire an advisor to assist them in finding other service providers to manage the plan. These non-fiduciary advisors often recommend other non-fiduciary service providers; such as Fidelity‚ Nationwide‚ The Principal‚ John Hancock‚ or Charles Schwab. The other providers offer investment options and often provide management services; such as recordkeeping and administration, with the fees paid through revenue sharing practices.
The act of hiring an advisor and the other service providers is in itself a fiduciary function. Mistakenly the fiduciary usually assumes that the advisor is acting in a fiduciary capacity and will monitor the other service providers.
If it is the intent of the fiduciary to transfer the fiduciary duties to an entity who has expertise in managing a qualified plan, the fiduciary can hire an ERISA §3(21) independent fiduciary to handle the operational fiduciary functions; including, the duty to hire‚ monitor‚ and‚ if necessary‚ replace service providers. A §3(21) independent fiduciary will accept the fiduciary duties‚ in writing‚ and assumes liability for those functions.