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ABA: The American Bankers Association
Industry Insight

Benefits of Community Banks Outsourcing 316 Plan Administrator Fiduciary Duties

  • Brought to you by Pentegra
  • Published February 5, 2025

The role of the 3(16) Plan Administrator under the Employee Retirement Income Security Act of 1974 (“ERISA”) is particularly demanding, encompassing plan operations, regulatory compliance, and participant communications.

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Community banks play a vital role in supporting local economies, but their limited resources often require bank employees to juggle multiple responsibilities. Managing a 401(k) plan—a critical benefit for attracting and retaining talent—adds another layer of complexity. The role of the 3(16) Plan Administrator under the Employee Retirement Income Security Act of 1974 (“ERISA”) is particularly demanding, encompassing plan operations, regulatory compliance, and participant communications. For community banks, outsourcing 3(16) fiduciary responsibilities to a professional provider can be a strategic decision that delivers substantial benefits.

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