Is a Plan Administrator Required for ERISA and non-ERISA Plans?

Experts from Groom Law Group and CAPTRUST answer questions concerning retirement plan administration and regulations.

I read your Ask the Experts column on the definition of a plan administrator under ERISA Section 3(16) with great interest as I was unfamiliar with the term. Is it an optional provision of ERISA, or are ALL ERISA retirement plans required to have a plan administrator under ERISA Section 3(16)? And what about non-ERISA plans?”

Charles Filips, Kimberly Boberg, David Levine and David Powell, with Groom Law Group, and Michael A. Webb, senior financial adviser at CAPTRUST, answer:

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The Experts are glad you raised this issue since plan sponsors are often confused about the plan administrator requirements. Under Section 3(16), having a plan administrator is NOT optional for plans subject to the Employee Retirement Income Security Act. An ERISA plan is indeed required to have a plan administrator and, as indicated in our prior column, the plan administrator is the plan sponsor unless another person/entity is indicated in the plan document.

Fortunately, although ERISA and related Department of Labor guidance makes multiple references to the term, the actual duties of a plan administrator as specified in ERISA are somewhat limited, including signing the annual Form 5500 report as the plan administrator. So, if you are unfamiliar with the term as a representative of a plan sponsor, it won’t take much to bring you up to speed. Reading our prior column referenced above and having a discussion with ERISA counsel about whether there are any doubts as to the identity and duties of the plan administrator should suffice.

As for non-ERISA plans, the plan administrator definition is found in ERISA, but not in the Internal Revenue Code. There is no corresponding rule under the Internal Revenue Code requiring that plans which are not otherwise subject to ERISA are required to have a plan administrator. As such, non-ERISA plans do not technically require a plan administrator as defined under Section 3(16). That said, even non-ERISA plans generally have the employer (or perhaps a committee) fill a role similar to that of the “plan administrator.”

NOTE: This feature is to provide general information only, does not constitute legal advice, and cannot be used or substituted for legal or tax advice.

Do YOU have a question for the Experts? If so, we would love to hear from you! Simply forward your question to Rebecca.Moore@issgovernance.com with Subject: Ask the Experts, and the Experts will do their best to answer your question in a future Ask the Experts column.

TUESDAY TRIVIA: The Inspiration for Dr. Seuss’ ‘Green Eggs and Ham’

You might be surprised at what drove Dr. Seuss to write many of his books.

Theodor Seuss Geisel, aka Dr. Seuss, wrote many children’s books that nearly all of us are familiar with. But you might be surprised at the drive behind much of his work.

According to several sources, in response to an article published by Life magazine, a publisher challenged Geisel to write a book that first-graders could read on their own and that held their attention. The article, “Why Do Students Bog Down on First R? A Local Committee Sheds Light on a National Problem: Reading,” basically claimed that the books schools used to teach children to read were boring and included characters that were not relatable.

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Dr. Seuss produced “The Cat in the Hat,” using only 236 different words, all of them taken from an average first-grader’s vocabulary list.

He followed with numerous books that used even fewer words.

His book “Green Eggs and Ham” was inspired by a bet between Geisel and another publisher. According to The Art of Dr. Seuss project, the published bet Geisel he wouldn’t write an articulate, entertaining book using only fifty different words. “Green Eggs and Ham” included 49 monosyllabic words and a fiftieth three-syllable word “anywhere.”

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