ERISA 402(a) Named Fiduciary & 3(16) Plan Administrator
Under ERISA, every retirement plan must have a Named Fiduciary and a Plan Administrator. Unless these roles are formally delegated in writing to a professional ERISA 402(a) Named Fiduciary and 3(16) Administrative Fiduciary, the employer carries both roles, along with the legal exposure that accompanies them.
Fiduciary Wise accepts formal delegation of ERISA §402(a) and §3(16), assuming discretionary and administrative responsibility in accordance with federal fiduciary standards. That delegation transfers as much 402(a) and 3(16) responsibility and risk from the employer to Fiduciary Wise as the law allows.
What ERISA Actually Requires
ERISA §404(a)(1)(A) and §404(a)(1)(B) impose a
prudence standard requiring fiduciaries to act:
- With care, skill, prudence, and diligence
- Solely in the interest of participants
- In accordance with plan documents
- With appropriate oversight of delegated service providers
If the Named Fiduciary and Plan Administrator roles are not properly delegated, responsibility remains with the employer, regardless of who “handles” day-to-day work.
Delegation must be formal.
Oversight must be documented.
Authority must be clear.
Our Role as ERISA 402(a) Named Fiduciary
When designated as the Named Fiduciary, Fiduciary Wise:
- Accepts discretionary fiduciary authority under ERISA
- Oversees plan compliance and operational integrity
- Monitors delegated service providers
- Ensures fiduciary processes align with ERISA standards
- Conducts structured governance reviews
- Documents fiduciary decisions and oversight actions
We operate independently and do not sell investment products or compete with advisors or TPAs.
Our Role as ERISA 3(16) Plan Administrator
As Plan Administrator, we assume oversight responsibility for statutory administrative functions, including:
- Annual review, reconciliation, and signing of IRS Form 5500
- Signature authority as Plan Administrator
- Verification of plan reporting accuracy
- Oversight of required notices and disclosures
- Coordination of required schedules and attachments
- Monitoring plan-level compliance obligations
This shifts formal administrative liability away from the employer and into a properly designated fiduciary structure.
What Meaningful Risk Transfer Looks Like
When properly delegated:
- The Named Fiduciary accepts discretionary oversight responsibility.
- The Plan Administrator assumes statutory administrative liability.
- Governance processes are formalized and documented.
- Oversight of service providers becomes structured and defensible.
The employer retains settlor decisions (plan design, contribution levels, etc.), but fiduciary and
administrative exposure is materially reduced.
Delegated Fiduciaries Must Meet an Expert Standard
Under ERISA, fiduciaries are held to a “prudent expert” standard, not a general business standard.
This means that anyone serving in a fiduciary role must either have the appropriate expertise to perform those responsibilities or engage qualified experts to support those decisions.
When fiduciary responsibility is delegated, that standard does not go away; it becomes even more important.
Courts have consistently reinforced this expectation.
In Donovan v. Cunningham, the Fifth Circuit made clear that acting in good faith is not sufficient if the fiduciary lacks the knowledge required to evaluate decisions. Fiduciaries are expected to bring the level of care, skill, and diligence of someone experienced in the matters they oversee.
Similarly, in Liss v. Smith, the court emphasized that fiduciaries who lack the expertise to manage
specific responsibilities have an affirmative duty to seek qualified, independent advice—and to properly evaluate the experts they engage.
What This Means in Practice
Delegating fiduciary responsibility is not simply a structural decision. It is a decision about who is
assuming responsibility and whether they are equipped to fulfill it.
A prudent fiduciary process includes:
- Selecting providers with demonstrable expertise in their designated role
- Understanding the scope of responsibilities being delegated
- Establishing a process to monitor performance over time
- Documenting how decisions are made and reviewed
Without this level of diligence, delegation alone does not reduce fiduciary exposure.
Fiduciary responsibility cannot be outsourced to a title; it must be supported by expertise and process.
A Formalized Fiduciary Governance Process
Plan Administrative Committee (PAC) Meetings
We conduct and moderate structured fiduciary meetings designed to:
- Review and certify Form 5500
- Benchmark fees and services
- Confirm fiduciary awareness and disclosures
- Monitor delegated responsibilities
- Review prior action items
- Document procedural prudence
Meetings are formally documented with written minutes and audio records.
Who Named Fiduciary Services Are For
This structure is appropriate for:
- Employers sponsoring 401(k) or ERISA 403(b) plans
- Organizations lacking internal ERISA expertise
- Plan sponsors seeking formal fiduciary designation
- Committees wanting documented procedural prudence
- Advisors seeking independent fiduciary alignmen
It is especially appropriate for employers who do not wish to personally carry Named Fiduciary liability.
We do not:
- Replace your investment advisor
- Replace your TPA
- Sell proprietary investment products
- Provide participant-level financial advice
- Interfere with plan design decisions
We assume fiduciary designation and execute governance oversight within ERISA’s legal framework.
