There are a number of situations where an independent plan administrator may be required to manage the on-going operation of a plan.
Company operations may cease as a result of bankruptcy or financial distress and can leave the benefit plans without a plan sponsor. Fiduciary Counselors can act as the plan administrator and named fiduciary for plans in these situations. We have fulfilled this role in a number of cases, most recently for the Enron Corp. Savings Plan and for four plans maintained by plan sponsors in the Revstone Industries controlled group. Often we have been responsible for the orderly wind up of the plan’s affairs, including final distributions to plan participants and beneficiaries.
In addition to serving as the plan administrator for plans with troubled or absent sponsors, Fiduciary Counselors can step into the role of independent fiduciary for non-qualified plans such as severance plans or other supplemental plans. Often, the responsibilities of an independent third party are specified under the terms of a plan or trust.
What We Do
Fiduciary Counselors is capable of stepping into the role of plan administrator and assuming responsibility for:
- Overseeing the investment of plan assets;
- Manage plan service providers and oversee the Administration of plan benefits, including final participant distributions;
- Preparing and coordinating the plan’s final regulatory filings;
- Calculating plan benefits under supplemental retirement plans;
- Making benefit determinations under the terms of a plan;
- Handling participant or beneficiary appeals;
- Communicating with participants and beneficiaries, as appropriate.
- We assumed full responsibility for a defined benefit plan where the plan sponsor had entered bankruptcy. We developed an investment policy consistent with the plan’s liabilities and anticipated termination and then restructured the portfolio investments accordingly. This involved selling equity assets, reinvesting the proceeds into a number of fixed income positions, negotiating disposition of several private investment positions and actively managing the cash position to cover variable levels of lump sum distributions.
In this case, the plan sponsor had acquired a number of plans through merger. We worked with the plan sponsor to transition plan recordkeeping operations to an outsourced provider, where records were incomplete in many cases because of the acquisition activity. We developed plan communications, and managed the outsourced provider service agreement. We worked with the trustee to resolve distribution issues: missing participants, lost checks and stale checks. We were responsible for assuring that all regulatory filings were made and that the plan remained in compliance during our assignment.
- We assumed full responsibility for a defined contribution plan where the plan sponsor had entered bankruptcy under Chapter 11, which was converted to a Chapter 7. We worked with the plan sponsor and the investment advisor to establish a reserve account for payment of plan expenses related to distributing the assets to participants. We maintained an investment array that was appropriate for the period during which the plan assets were distributed. After an extensive search for missing participants, we established rollover IRAs for them. We were responsible for assuring that all regulatory filings were made and that the plan remained in compliance during our assignment.
In each of the above examples, we worked cooperatively with investment managers, plan consultants, trustees, auditors and other vendors as frequently as necessary to ensure optimal resolution for plan participants.
The terms of any particular plan and the status of its sponsor will play a large role in determining the need for an independent plan administrator. Fiduciary Counselors has experience stepping into the role of plan administrator in both common and atypical scenarios. We welcome the opportunity to discuss any situation in greater detail. Please contact us if you’d like to explore our solutions.