Small Plans Have More Opportunities for 3(16) Service

It covers a wide range of tasks, including developing an investment policy statement, selecting and monitoring investments, filing Form 5500 with the Department of Labor and other regulatory reports, non-discrimination testing, contribution limits tracking, distributions and hardship requests. Additionally, the Exchange automatically enrolls participants in the plan at a 6% contribution rate with automatic escalations of 2% a year up to 10%.

Transamerica serves as recordkeeper for the Retirement Plan Exchange, while 3(21) and 3(38) fiduciary and 3(16) administrator services are handled by independent firms.

“In traditional arrangements, an employer establishes its own plan and assumes primary responsibility for the management and administration of the plan,” says Jim Kais, senior vice president, defined benefit and special markets sales at Transamerica Retirement Solutions. “With the Retirement Plan Exchange, participating employers receive help developing an investment policy statement and lineup, assistance with monitoring of investments, as well as ongoing reporting support. Outside of the Retirement Plan Exchange, these duties fall directly on the employer.”