Did You Know the Plan Sponsor is the most important fiduciary?
Under ERISA 3(16)B and 3(5), the terms “Plan Sponsor” and “Employer” are defined. The person “acting directly as the employer” is key. This could be an owner or executive. The Plan Sponsor ultimately is responsible for the selection of at least one of the other plan fiduciaries. The plan document and Form 5500 both require the signature of the Plan Sponsor. This person must have authority and a certain amount of control in order to act in this capacity. This is tricky. If an executive signs as Plan Sponsor but must obtain approval from the Board, then who is the real Plan Sponsor? More than likely, the answer is both. If we can help clarify responsibilities within your plan, please give us a call.