Plan Sponsor

A Plan Sponsor, in the context of employer-sponsored 401(k) plans, refers to the entity responsible for establishing and maintaining the retirement savings plan for the benefit of its employees. This key player takes on the fiduciary role of overseeing the plan, ensuring it complies with regulatory requirements, and making decisions that impact the plan's features and investment options. The Plan Sponsor can be an employer, a committee designated by the employer, or the organization's board of directors.

 

 Examples:  

 

  • Corporate Employer:   In a typical scenario, a large corporation serves as the Plan Sponsor for its employees' 401(k) plan. The employer designs the plan, selects the investment options, and may also contribute matching funds to incentivize employee participation.

 

  • Small Business Owner:   Even smaller businesses can act as Plan Sponsors for their 401(k) plans. In this case, the owner or a small committee is responsible for administering the plan, ensuring compliance, and managing contributions and distributions.

  • Union or Association:   In certain instances, labor unions or professional associations may establish 401(k) plans for their members. These organizations act as the Plan Sponsor, negotiating the plan's terms and providing retirement benefits to their members.

 

The role of the Plan Sponsor is crucial in promoting retirement security for employees. By diligently fulfilling their fiduciary responsibilities and offering attractive retirement benefits, Plan Sponsors play a pivotal role in helping workers build financial stability for their post-work years.

Next Up

Each month, Mployer collects and presents some of the most relevant and most pressing recent changes in law, compliance, and policy in areas related to employee benefits, health care, and human resources.
The latest economic release from the Bureau of Labor Statistics reports that the U.S. added only 12 thousand new jobs last month, although multiple hurricanes hindered both job additions and data collection, while the unemployment rate held steady at 4.1%.
‍In this piece, we take a look at what kind of job openings are going to be most prevalent between now and 2033, as well as the education level needed to access those opportunities.