Simplify with JULY’s 3(16) Services

Complete Your Plan Offering: Take Advantage of JULY’s Expanded 3(16) Services

While business owners are driven, focused and thoughtful when it comes to their work, they need help keeping their retirement plans in compliance.  The rules outlined by the IRS and DOL can be overwhelming to a company (plan sponsor) who is focusing on growing in their small business. Often times administrative duties are a deterrent to a company owner sponsoring a retirement plan or the owner does not fully realize number of tasks and responsibility required to stay out of trouble.

What is a 3(16) Fiduciary?

A 3(16) fiduciary is a provider retained by a company (plan sponsor) to manage the daily administrative tasks for a retirement plan.  The 3(16) fiduciary services may be offered through the retirement plan provider. Tasks may include managing ongoing payroll files to ensure data accuracy, filing government forms, distributing participant notices, maintaining required plan documents, and calculating employer contributions—there are literally hundreds of tasks to monitor. All things needed to stay in compliance with the law. And all things that take precious time for the business owner if a 3(16) fiduciary provider is not hired.

Benefits of a 3(16) Fiduciary

Transferring the administrative tasks to a 3(16) fiduciary allows the business owner to focus in areas of their expertise.  JULY’s comprehensive 3(16) services include:

  • 1. Maintain the Plan Document and Amendments
  • keep required governing documents current
  • 2. Plan Management
  • sign and submit required DOL filing documents
  • approve IRS compliance testing
  • manage fidelity bond vendor
  • coordinate a plan review with the employer
  • 3. Employee Management
  • provide all required notices to eligible participants
  • monitor timely data submissions
  • validate data as received for accuracy & missing information
  • calculate employer contributions
  • track employee eligibility
  • manage employee deferral & election changes
  • 4. Distributions and Withdrawals
  • verify participant eligibility for withdrawals
  • approve participant withdrawals

For a comprehensive look at our 3(16) services click here.

What could happen without 3(16) fiduciary oversight?
  • 1. Ineligible employees begin participating in the plan.
  • Costs and penalties add administrative issues for the employer.
  • Adds frustration to employees.
  • 2. Plan Documents are not updated when required
  • A correction filing with penalties must be submitted to the IRS.
  • 3. Wrong definitions are used for determining employee and employer contributions
  • Costly and complex correction measures must be undertaken.
Data Integrity is Key

The most important advantage of using a 3(16) administrative fiduciary is that a plan has better, more reliable data.  There is significant value in receiving comprehensive data with each payroll and JULY validates several points to ensure accuracy.  JULY’s 3(16) services keep a plan sponsor’s risk low and service level high.

About JULY:

JULY is a 401(k) services company specializing in hi-touch, tech-enabled retirement plan services. Our employees have served as plan experts to advisory firms, advisor and employers in the small and micro 401(k) plan market for over 25 years. Over the last decade, our in-house software development team has built a host of proprietary technology solutions to streamline, automate and simplify all facets of retirement planning to make processes rewarding and easy for our clients. For more information about JULY, visit our website.

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