Typically, the employer is considered the 401(k) “plan sponsor,” whereas the day-to-day running of the plan may be handled by a third-party “plan administrator.” Understanding the different responsibilities between the plan sponsor and plan administrator is essential to maintain compliance with all IRS and DOL regulations.
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In addition to the owner of the company, the plan sponsor can also be a union, a group of representatives, or a key executive. Often, a plan sponsor is also referred to as a “fiduciary” – a person who takes legal responsibility for making decisions on behalf of plan participants. Fiduciaries agree to avoid conflicts of interest and work to keep fees reasonable. The fiduciary can also be held personally liable for plan losses caused by mismanagement.
The 401(k) employer handles the following tasks as the plan sponsor:
An administrator must be selected under the Employee Retirement Income Security Act of 1974 (ERISA). The admin can be the employer itself, a committee of employees, a company executive, or a third-party. Some aspects, such as giving out financial advice, can be outsourced to an investment broker, financial planner, or auditor.
A designated 401(k) plan administrator:
At Ubiquity, we specialize in creating small business 401(k)s and assisting plan sponsors in the day-to-day administration. We are committed to creating and maintaining a plan that’s personalized for each organization and its employees. Even if a company already has a plan, it’s a good idea to review the relationship with the administrator to be sure the deal is fair and the service provided is up to par. Check out our 401(k) resources to help you determine if your current plan is maximizing your retirement savings.
Compared to the competition, Ubiquity charges no AUM or per-participant fees, instead relying on a flat, low, monthly rate that has worked for us since 1999. Contact our team for details.
If you are a small business owner and need a retirement plan for yourself and your company, only Ubiquity offers flat-fee plans, plus expert guidance along the way.
We will fully customize your plan to meet the specific needs of your small business.
Setting up a 401(k) can be complicated. Only Ubiquity gives small business owners access to retirement experts in addition to industry-leading low flat-fees. Each sales expert has over a decade of experience assisting business owners in 401(k) plan design. Take advantage of this free benefit.