“The 5500 requests a signature of the Plan Administrator, but otherwise I do not see a reference to this term anywhere. Is it a plan fiduciary? Some other person or entity? Can it be a third party?”
David Levine, Groom Law Group, answers:
Another excellent question. The term “Plan Administrator” is used in many ways in the land of retirement plans, so the Experts want to provide a bit of background. Section 3(16) of the Employee Retirement Income Security Act (ERISA) defines the term “Administrator” to mean:
(i) the person specifically so designated by the terms of the instrument under which the plan is operated;
(ii) if an administrator is not so designated, the plan sponsor; or
(iii) in the case of a plan for which an administrator is not designated and a plan sponsor cannot be identified, such other person as the Secretary [of Labor] may by regulation prescribe.
The duties of an ERISA section 3(16) administrator as specified in ERISA itself relate mainly to reporting and withholding, notice and limited compliance activities. However, there are other parts of ERISA (and related guidance from the Department of Labor) that refer to “Plan Administrator.” Sometimes, third-party recordkeepers are referred to as the plan administrator, whether or not they actually are the plan administrator for ERISA purposes.
This combination of terms and usage can lead to confusion. Further, in the retirement industry, a number of services are labeled “3(16) services” but may move beyond the scope of ERISA section 3(16) and actually are actions of an ERISA fiduciary under ERISA section 3(21) that don’t fall within the definition of ERISA 3(16). Confusing isn’t it? Put simply, the key is to know who is the Plan Administrator.
Getting back to your question, for Form 5500 purposes, the ERISA section 3(16) definition controls. And the best place to look for who is the plan administrator for ERISA purposes, at least at first, is the plan document, which should name one. Some people erroneously believe that the plan administrator MUST be the employer, and, though it often is by designation in the plan document or by default, clearly ERISA allows for designations other than the employer. Other people believe that the plan administrator MUST be a third party, but again there is no basis for this assertion in ERISA (or the Code). The plan administrator may be a third party, but may also be the employer or an internal party.
You may need to look for designations or delegation of plan administrator status in documents outside the plan. For example, the plan may provide that the employer is the plan administrator unless it appoints another one such as a committee (a not uncommon provision), so you may need to find out if it has done so. As for whether a plan administrator is a fiduciary, if the plan administrator utilizes discretion in the administration of the plan, the administrator is a plan fiduciary as well.
One thing is certain, you should make sure whomever signs the 5500 as plan administrator is indeed the plan administrator! If the plan administrator is the employer, an authorized representative of the employer must sign the 5500.
Thank you for your question!
NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.
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