What We Need from You to Provide 3(16) Fiduciary Services  

Understanding 3(16) Fiduciary Service Requirements and Grounds for Termination 

As part of our 3(16) Fiduciary services, Ubiquity assumes certain responsibilities on your behalf. To fulfill our duties effectively, and comply with ERISA and IRS regulations, we rely on timely and accurate information from each plan our clients and partners. 

The following examples outline situations that may result in suspension or termination of 3(16) fiduciary services if not corrected after notice. Our goal is always to work collaboratively with you to resolve issues before taking any action; however, repeated or unaddressed non-compliance may require us to discontinue 3(16) oversight to protect the plan’s integrity. 

1. Incomplete or Late Data Submissions: Delays or errors in payroll or census files that prevent timely processing of contributions or loans, or failure to respond to data requests within required deadlines. 
2. Deposit or Funding Failures: Late or missing plan deposits, inaccurate ACH details, or repeated non-sufficient-fund occurrences that create compliance risk under ERISA’s timely deposit rules. 
3. Missing Fiduciary or Trustee Appointment: Lack of a designated Plan Administrator or Trustee as required by the plan document and ERISA regulations. 
4. Use of Non-Approved Custodian: Choosing not to use the plan custodian designated by Ubiquity, which is a condition of the 3(16) service. 
5. Assets Held Outside Approved Custodian: Maintaining plan assets outside the designated custodian or recordkeeping platform, preventing proper fiduciary oversight. 
6. Unsupported or Unverified Rollovers: Accepting rollover assets without proper documentation or verification of tax-qualified status. 
7. Missing Authorized Signatures: Failure to provide required authorized signers needed to process transactions or fulfill plan duties. 
8. Unresponsive or Uncooperative Behavior: Lack of communication or cooperation in resolving compliance issues, data corrections, or participant inquiries. 
9. Non-Compliance with Participant Notice Rules: Failure to deliver required plan notices to participants—especially those who have opted out of electronic delivery. 
10. Plan Abandonment: Loss of an active fiduciary or administrator, or lack of response to required plan actions, which may lead to referral to a Qualified Termination Administrator (QTA). 
11. Failure to Disclose Controlled or Affiliated Service Groups: Not disclosing related business entities that affect coverage or testing requirements under IRS rules. 

If any of the above issues arise, Ubiquity will first notify the plan sponsor in writing and provide a reasonable opportunity to correct them. If uncorrected, 3(16) fiduciary services may be suspended or terminated as described in the Service Agreement, though recordkeeping services may continue under a non-fiduciary model.