In this increasingly high risk regulatory environment, plan sponsors are seeking new ways in which they can delegate to others some of their ERISA fiduciary responsibilities. Included among them is authorizing another to assume core plan administration duties. These functions have traditionally been the sole purview of plan sponsors. The term, “plan administrator” is defined in Section 3(16) of ERISA, the foundational law governing employee benefit plans. The services of a plan administrator have therefore become known as “3(16) services.” Any service provider rising to the challenge to accept plan administration accountabilities - and the resulting liability that goes with them - will wish to carefully consider how to draft an appropriate service agreement.

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