Retirement plan fiduciary services and duties can be puzzling to Plan Sponsors, Plan Administrators and Retirement Committee Members. For that reason, many plan sponsors have chosen to mitigate some plan risk by hiring a professional fiduciary to manage some of the functions of the retirement plan as is permitted by the Department of Labor.
Fred Barstein, Founder and CEO of The Plan Sponsor University (TPSU), speaks with Yolanda Farrow, Senior Compensation and Benefits Manager at her firm after a Plan Sponsor University Program held at the University of Southern California. They discuss how hiring a 3(38) retirement plan fiduciary has made a difference within Ms. Farrow’s organization.
Full Transcript Here
This is Fred Barstein with 401k TV here in lovely Southern California at the University of Southern California where we just completed a TPSU program and I’m privileged to be with Yolanda. Welcome, Yolanda.
Thank you very much.
Okay if we ask you a few questions?
Okay. Before we do, just give our audience a little bit about yourself and what you do.
I’m a Senior Compensation and Benefits Manager for a sales and marketing organization. We have a little under 600 employees, about 540.
Great. Now, in the program you talked about you used outsource fiduciary services. I was impressed, 338, 316. Tell our audience, what is a 338, 316 mean?
The 338 allows the company to basically shift the financial or fiduciary responsibility to this outsourced arrangement. We found that our committee members were really stretched and didn’t have the time or the resources to really understand what was going on in the market. We wanted them to be confident when they made the decisions about the plan.
And so, the 338 is investments, although you still have to make sure the company is doing their job.
But you’re not making the decisions.
What’s a 316?
The 316 allows some of the third party administration responsibilities to also be shifted to-
Like filing the documents and everything like that.
And again, you have to make sure they’re doing their job.
How is that working? How is that program working for you?
It’s actually working very well. A lot of HR organizations these days have limited resources so we found that this worked for us extremely well. It allows us to stay on top of all of the responsibilities that come along with managing the plan and still stay in compliance.
Very good. And how long have you been doing it for?
It’s been a very short period. We’re working our way through the transition right now, but we’re optimistic on how it’s going to go. Everything is looking wonderfully well.
Good. It sounds great. Final question. A couple of things you’re going to take back when you leave the program after this?
I’m going to send my committee here.
You’re going to send your whole committee?
I’m going to send the whole committee for training.
We can also come out and train them as well, but I’d be good to have them all here.
That’d be awesome.
That would be a good one. We’d love to have them.
So, great. Well, thanks today for your comments and thank you for watching 401K TV. Stay tuned.