Plan Administrator for 401(k) Plan

[metsfan026]

Just curious, a client is looking to change who the Plan Administrator is for their 401(k) Plan (basically just who is able to sign the Form 5500).  Is there anything specific that we need to do in order to make that change (it's not a trustee, so I didn't think we needed a Plan Amendment).

Thanks in advance!

[Bri]

The PA is generally listed in the SPD.  But it's usually listed as the employer.  As long as it's just somebody different within the same company who also has legal authority to sign on behalf of the company as PA, there should be nothing further to update in the plan/SPD.

[metsfan026]

Just now, Bri said:

The PA is generally listed in the SPD.  But it's usually listed as the employer.  As long as it's just somebody different within the same company who also has legal authority to sign on behalf of the company as PA, there should be nothing further to update in the plan/SPD.

That's what I thought, I just wanted to confirm.  Thank you!

[Peter Gulia]

But consider reminding your client that there might be internal records of the company’s resolutions, consents, and other acts. Those records might document which humans have which responsibilities in acting for the company. The company, or an individual, might prefer that those records state accurately who’s responsible for what.

And if someone thinks it’s merely a tedious housekeeping chore, consider that these company records might affect the company’s indemnity obligations and an individual’s indemnity rights.

[ErnieG]

This is a function that may be outsourced, and it is more than just signing the Form 5500.  The Plan Administrator is responsible for the day-to-day operation of the Plan.  Our recommendation to business owners, who are not in the business of running a Qualified Retirement Plan, is to outsource this function.   While the business owner continues to be liable for the actions of the choosing an outsourced Plan Administrator, they are relieved of those day-to-day operational issues.

[Pam Shoup]

I agree with Ernie G and Peter Gulia.  The Plan Administrator role is much more than just signing the Form 5500.  The Plan Administrator is legally responsible and liable for the operation of the plan and is a fiduciary to the plan.  If there were to be an IRS or DOL audit or review, the PA is the one who would be the hot seat, so to speak.  Anyone who is taking on this role should be aware of their fiduciary responsibilities. Most service providers in our industry do not take on a fiduciary role with the plan and instead perform ministerial functions at the direction of the fiduciary.  There are service providers who will take on the PA role and that will be clearly defined in any service agreement and most likely in the plan document.  

As far as other things that need to be done to change the Plan Administrator, I would look at your Plan Document and previous 5500s to determine if the company is named or an individual is named.  You may need a change to the document and/or SPD.  If an individual is named in the Plan Document and/or on previous 5500 forms, you may also need to file Form 8822-B with the IRS.

As always, checking board minutes, etc. is always advisable.  There should be something official that says who is authorized to act on behalf of the plan.  These can become really important in the event of a fiduciary breach and any fidelity bond/fiduciary liability insurance the plan may have.