Making tedious retirement tasks vanish with 3(16) fiduciary services
For some reason, the circus has always freaked me out. Maybe it’s the wide variety of spooky movies featuring circus characters. Maybe it’s my fear of heights (please don’t die, tight-rope walker) or how hot and stuffy the circus tents always felt to me. And don’t even get me started on clowns.
While I loathe the circus, I still wish I had a little magic for adulting purposes. I’m not talking swallowing knives or jumping through fiery hoops. I’m thinking more along the lines of a disappearing act. That coffee I spilled when I tripped up the stairs? GONE. That accident my puppy had on my favorite rug? POOF. The dust accumulating on my ceiling fan? VANISHED.
A girl can dream, but of course I know that this kind of wizardry doesn’t exist. However, there IS a strange magic I learned about when I entered the retirement industry. The kind of magic that makes the most annoying tasks vanish and to-do lists disappear. What is this sorcery? They call it 3(16) fiduciary outsourcing.
Retirement Plan Painful Process #1: Sending Annual Notices
Let’s be very clear: retirement plans offer a plethora of benefits in the form of tax benefits, saving for the future, and employee retention. But like all good things, they require some work. Part of this work is sending participant notices every year. What kinds of notices? The list can be long, depending on plan changes and features. On top of Annual Fee Disclosures, employers must also provide a notice if they have an automatic enrollment feature in their plan, another notice if they’ve sponsored a safe harbor plan, and potentially more.
Various other notices must be provided from time to time, and a good third-party administrator (like EGPS) will keep clients up-to-date on what is needed and when. However, the responsibility of distributing these notices to every employee falls on the employer. Some of these notices can be distributed electronically (if the employer has valid company email addresses for every participant), while some cannot. Managing the distribution of these notices can be a tedious, time-consuming task. And knowing which notices can be sent electronically vs. hard copy can be confusing. BUT have no fear: this is where the magic happens! By hiring a 3(16) fiduciary service provider that handles notice distribution (like EGPS), employers can cross this task off their list (or never even think about it). POOF. GONE.
Retirement Plan Painful Process #2: Tracking Eligibility and Distributing Enrollment Materials
All retirement plans have eligibility requirements written into the plan document. For example, maybe employees need to be at least 21 years old and work 90 days with the company before they can defer pay into the plan. While it sounds simple enough, employers are responsible for tracking when employees are eligible, which can be a headache (especially if they’re hiring a lot).
In addition to keeping up with when all participants are eligible, employers are also required to notify them and send enrollment materials for the plan. Sound fun? To me personally, it sounds stressful. Luckily, EGPS can manage all of this, waving our magic fiduciary wand (AKA handing it over to our experienced, expert team members) and making this task disappear for employers. POOF. GONE.
Retirement Plan Painful Process #3: Compiling Annual Census Data
Every year, employers receive a pesky request from their third-party administrators (TPAs): please send your annual census data! This information includes a full picture of employee information – including SSN, hire dates, birth dates, salary, retirement plan deferrals and contributions, etc. While this might be a pain for employers to compile, it’s extremely important for TPAs to have accurate data, so they can administer the plan correctly and complete the required testing.
However, we get that its importance doesn’t make it less of a time-consuming, annoying project. But…you guessed it! The magic works here, too. When EGPS acts as an employer’s TPA and 3(16) fiduciary provider, this task vanishes for business owners. That’s right – EGPS can compile this information on our own, so the census request is a thing of a past. POOF. GONE.
Not Just an Act: The Magic Continues
While the circus and magic shows might be smoke and mirrors, EGPS 3(16) Fiduciary Services are not. We have credentialed, expert professionals working behind the scenes on our clients’ plans, ensuring the magic happens. By magic, we of course mean the tasks above (and several others) disappearing from employers’ plates, but being carefully managed by our detail-oriented 3(16) team.
Interested in all the painful processes and tasks we can make disappear for your clients? Fill out the form below and we’ll send you a checklist of the magic.