ERISA and Federal Agencies Definitions
The Employee Retirement Income Security Act of 1974 is a federal law made up of IV titles. Title I was established to protect the interests of participants and beneficiaries in employee benefit plans. Title II provides for standards that pension plans must meet in order to qualify for favorable tax treatment. Title III deals with jurisdictional matters and coordination of enforcement and regulatory activities by the DOL and IRS. Title IV establishes insurance requirements for defined benefit plans. The administration of ERISA is divided into several federal agencies (DOL, EBSA, IRS & PBGC).
Is the Department of Labor which has oversight of EBSA and coordinates enforcement and regulatory activities of Title III with IRS.
Is a federal agency within the Department of Labor which administers Title I of ERISA.
Is the Internal Revenue Service and administers Title II and jointly coordinates enforcement and regulatory activities of Title III with DOL.
Is the Pension Benefit Guaranty Corporation and administers Title IV of ERISA
Plan Administration Definitions
A Fiduciary is an individual who has discretionary authority or control over the management of an employee benefit plan, has any authority or control respecting management or disposition of plan assets, renders investment advice for a fee or has discretionary authority or responsibility in the administration of the plan.
The Plan Administrator is the official Plan Sponsor or Board of Trustees of the plan. When laws and plan language refer to the "Administrator", this is the person or entity to which it refers.
The Plan Sponsor is the employer in the case of an employee benefit plan established or maintained by a single employer. It is also the employee organization in the case of a plan established or maintained by an employee organization. In the case of a plan established or maintained by two or more employers or jointly by one or more employers and one or more employee organizations, the term “Plan Sponsor” refers to the association, committee, joint board of trustees or other similar group of representatives of the parties who establish or maintain the plan.
Contract Service Providers are individuals and/or entities that contract with the Plan Sponsor to administer their plan (TPAs, Consultants, pharmacy vendors, etc.)
Typically, the Plan Administrator and Plan Sponsor are one and the same and are considered Fiduciaries of the plan. Plan Administrators and Contract Service Providers are often referred to as “Administrators”. This causes great confusion in many instances. It is important to make the distinction and not confuse the two, as the authority and responsibilities are very different. Plan Administrators are the official Plan Sponsors or trustees of the plan. They are typically one and the same, and are ultimately responsible for the administration of the plan. Contract Service Providers administer the plan, on behalf of the Plan Sponsor, based on a written agreement (usually known as an Administrative Services Agreement), and are generally not vested with fiduciary obligations. ABPA is considered a Contract Service Provider.