Vendor Management Guide Questions and Answers Graded A 2024

ERISA Prudent Man Rule - Requires plan fiduciaries to hire knowledgeable professionals for plan duties. Fiduciary Duty - Obligation to act in the best interest of plan participants and beneficiaries. Plan Sponsor - Employer responsible for selecting and monitoring plan service providers. Exclusive Benefit Rule - Requires fiduciaries to act solely for the benefit of participants and beneficiaries. Plan Service Providers - Entities engaged to perform functions beyond the sponsor's expertise. DCIO - Defined Contribution Investment Only firms that do not assume fiduciary roles. ERISA 3(38) Fiduciary - Monitors and manages plan investments, relieving appointing fiduciary of decisions. ERISA 3(21) Fiduciary - Provides investment advice and recommendations for plan officials to select. Limited Scope Fiduciary - Provides specific plan services without discretion over plan investments. Plan Consultant - Assists with plan projects, design, and benchmarking, may or may not be a fiduciary. Third-Party Administrator (TPA) - Provides plan document preparation, compliance testing, and Form 5500 filing. Recordkeeper - Maintains participant account records, processes transactions, and provides access to data. Investment Platform - Structure offering plan investments, can be proprietary or open architecture. Proprietary Platform - Offers funds primarily from the provider, limiting external fund selection. Open Architecture Platform - Allows plan sponsors to select various funds for a customized investment platform. Market Segmentation - Recordkeepers categorized by plan asset size and primary markets served. Plan Sponsor Council of America - Organization providing insights on plan sponsor practices and statistics. Form 5500 - Annual report filed with the DOL providing financial and operational details of the plan. ERISA - Employee Retirement Income Security Act governing employee benefit plans. DOL - Department of Labor overseeing compliance with employment laws and regulations. Pension Consultant - Provides advice on pension plan design, compliance, and administration. Compliance Testing - Evaluates plan compliance with IRS and DOL regulations. Investment Menu - List of investment options available to plan participants. Plan Design - Structuring the features and provisions of a retirement plan. Fee Benchmarking - Comparison of plan fees with industry standards to ensure competitiveness. Service Provider Search - Process of identifying and selecting vendors to support plan operations.