Running a retirement plan carries liability – there’s no way around it. Because of the fiduciary nature of the arrangement, where the employer agrees to hold compensation from employees and remit that to an account in their name, Employers are required to act in the best interest of that employee at all times – period.
When a company sponsors a retirement plan they are classified as the “Named Fiduciary”. The Named Fiduciary is the entity that is ultimately liable for everything that happens in a plan from the daily administration of the plan to the selection of investments or service providers.
Further, the liability is personal. That is, individuals who make discretionary decisions within a retirement plan are personally liable for their decisions. There is no veil of corporate protection based on company structure. The liability follows the individuals.
Many service providers will advertise the fact that they take over fiduciary liability. They usually toss in fancy names like 3(16) Plan Administrator, 3(21) or 3(38) Investment Provider, etc. Unfortunately, many Employers incorrectly believe they have rid themselves of liability when utilizing one of these services providers. As long as the Employer remains the Plan Sponsor, and thus the Named Fiduciary, this is false. At best, these services providers are co-Fiduciaries.
BLUE HAWK Retirement is different.
When you adopt into BLUE HAWK Retirement, you merge your existing or new plan into BHR, and thus cease to be a Plan Sponsor or Named Fiduciary. As such, you’ve now offloaded the fiduciary liability to BHR.
There is some liability that stays with you – BHR can’t take it all. You remain responsible for submitting accurate and timely payroll files and remitting contributions on time. We may occasionally ask you to explain a discrepancy, and we need adopting employers to answer. These things may require time and effort, but the vast majority of the liability is offloaded to BHR.
