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Who Is Responsible for Carrying Out the Legal Requirements of a Plan

Once an emergency has been declared, the local government can bypass normal procurement and bidding requirements and challenge the local government for emergency state and federal funding. For more information, visit our Local Government Emergency Planning page. Who: The sponsor of a qualified pension plan, such as a 401(k) plan, is typically the business unit whose employees are covered by the plan. In a controlled group, the plan sponsor is one of the affiliated entities that participate in the plan. In a multi-employer plan (PER), one of the independent entities acts as the plan sponsor, as is the case with PEOs. If your employees participate in a 401(k) plan, you must determine whether you or another company is the plan sponsor. The only legal requirements to be an agent are that the person be of sound mind and at least eighteen years old. Your agent should be someone you trust. Your agent is required by law to act in your best interests, keep records of transactions, not mix your property with theirs and not enter into a conflict of interest. However, an agent still has the potential to act illegally, so it`s important to trust the person you choose.

Taking responsibility for the preparation and signing of the annual Form 5500 of a district plan cannot be engaged by the county council without court approval to hire a lawyer independent of the elected prosecutor (RCW 36.32.200). We explore this topic in more detail in our publication Knowing the Land. Note: Do not confuse a “custodian” with a trustee. A custodian is often hired by the trustee to hold plan assets and manage the purchase and sale of investments. A custodian`s services are documented in a custody agreement, but the trustee has control over what the custodian does and is generally responsible for their actions. If a plan sponsor wants to establish a pension committee, they should use a charter that delegates the fiduciary responsibility of the plan sponsor to the committee. At a minimum, the Charter should also describe the general responsibilities of committee members, how members will be selected and replaced, and how and when the committee will report to the plan sponsor. The committee should maintain written records documenting the prudent process that plan members use in all fiduciary decisions relating to the plan. The Federal Register is a legal journal published every weekday by the National Archives and Records Administration on federal news. It includes federal agency regulations, proposed rules, public announcements, executive orders, proclamations, and other presidential documents. Given the amount of work behind managing the 401(k) plan — not to mention the expertise required — it`s common for plan sponsors and trustees to bring in specialists in the conversation. Sometimes this means developing expertise within the company, such as appointing a pension committee.

In other cases, it means working with external service providers. Lawyers are not needed to enforce a power of attorney. However, it may be a good idea to consult with a candidate for advice on the powers granted, advise your candidate agent, and ensure that your document meets all legal requirements. Who: Section 3(16) of the ERISA states that a qualifying defined contribution plan must have a “plan administrator” (often referred to as a “3(16) plan administrator”). Unless another person or entity is specified in the plan document, plan administrator 3(16) is the plan sponsor. Pre-approved plans are a convenient and easy way to start a pension plan, but your responsibilities don`t end once your plan is adopted. You should: Plan sponsors who do not want to take an active role in the selection of plan investments, either from a risk tolerance perspective or due to lack of experience, are often encouraged to hire an investment manager 3(38). Cities can either hire an “in-house” municipal lawyer or enter into a contract for legal services.

While the city council creates the position and determines the remuneration of an internal city attorney, the executive branch (the mayor or city manager) chooses the person who will fill the role (sometimes subject to council approval). If the position of City Attorney has been converted to a position by order or provision of the by-law and the position is filled by legal services contracts, the Mayor or City Manager will elect someone to fill that position, subject to possible confirmation by Council. Who: Section 403 of the ERISA requires that the assets of a qualified plan be held in trust by one or more trustees. Trustees must be named in the escrow agreement, in the written plan document or by the appointed trustee. The trustee may be an individual employee of the plan sponsor or an external trustee of the corporation. Designated Fiduciary Responsibilities: The designated trustee is responsible for the selection, valuation and oversight of all other trustees in the plan, as well as any non-fiduciary service providers. Under the law, this is the trustee that members and beneficiaries can go to determine who is responsible for each aspect of the plan. The appointed trustee may delegate responsibilities to others, such as a trustee or investment manager (see below). Although you can appoint multiple agents, decide whether these agents should act together or separately when making decisions. Multiple agents can ensure more informed decisions and act as controls against each other. The downside is that multiple agents may disagree, and one person`s schedule can potentially delay important transactions or signing legal documents. These tasks will help you keep your plan running smoothly and remain eligible for tax benefits.

Fiduciary Duties: The trustee has the primary and exclusive fiduciary responsibility to ensure that plan assets are managed in the best interests of plan members and in accordance with the plan document. The impetus for the trustee and/or appointed trustee can be difficult here, as they must act as a “prudent expert” when selecting planned investments (i.e., they must choose planned investments with the care, skill, prudence and diligence of someone familiar with investments at the institutional level). The good news is that the designated trustee can limit his responsibilities by asking him to act only on direction. It may also delegate fiduciary responsibility to one or more investment managers. The only time the city council has the authority to select and hire (as well as dismiss) the city attorney is when the city attorney is contractually engaged and the position of city attorney has not been converted into an office by ordinance or by-law. See Koler v. Black Diamond. Regardless of how they are selected, the city attorney advises all city officials, including council members, and the city council should rely on the city attorney for legal advice on city matters. For more information, see our blog post Roles of the Mayor/Manager and Council/City Council 101: Purchasing Legal Services. A power of attorney is only valid if you are mentally competent when you sign it and, in some cases, incompetent when it comes into effect.

If you think your mental abilities may be questioned, have it checked in writing by a doctor. If your power of attorney does not specify the mental capacity determination requirements, your officer will still need written medical confirmation of your incompetence in order to conduct business on your behalf. A court may, in certain circumstances, even be compelled to decide the question of jurisdiction. Essentially, a 3 (21) is an aide, not a decision-maker, and is considered a co-trustee with the trustee or designated trustee. This type of relationship works best for a plan sponsor who always wants to have the final authority over the choice of the plan`s investment range. Ultimately, it`s important for plan sponsors to understand who is responsible for selecting a 401(k) plan`s investment mix and choosing an investment service provider that best fits the sponsor`s goals. Similar to the city attorney, the elected district attorney represents the county as a unit and advises all branches of county government, pursues actions on behalf of the county, and defends the county against any legal action. The functions of the prosecutor are set out in RCW 36.27.020. While tracking the who`s who behind managing the 401(k) plan can be overwhelming, you should know that you don`t have to do it alone.

Still not sure who and what you need to set up a 401(k) plan? Need new players for the 401(k) team plan you already have? Contact a Human Interest Retreat Specialist today. Congratulations! You have an employee pension plan! Of course, you want to do the right things to execute your plan. These tips will help you stay on track. A plan may delegate the plan`s fiduciary responsibility for investments from the plan`s trustee or designated trustee to an ERISA 3(38) investment manager. An investment manager referred to in section 3(38) is an investment adviser, bank or registered insurance company that meets certain qualification standards and has certified in writing that it is a trustee of the plan.

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