SERVICE OVERVIEW
KNOW THE DIFFERENCE
Covers the administrative operation of the plan: the functions Nydia’s 3(16) engagement is built around.
A named advisor who provides investment recommendations while the plan sponsor retains final decision-making authority.
A named advisor who takes on full discretionary authority over investment selection and monitoring.
Business owners take on personal fiduciary exposure the moment they sponsor a retirement plan, even when day-to-day administration is outsourced. Naming Nydia as the 3(16) fiduciary for defined functions gives sponsors a documented, contracted party accountable for those decisions, backed by Nydia’s CEFEX certification for operational fiduciary standards and Department of Labor-aligned cybersecurity practices.
A named 3(16) fiduciary gives founders and early leadership teams a documented layer of protection while they’re still building internal HR and compliance infrastructure.
As plans add features like PEPs, MEPs, or combination DB/CB designs, the administrative decision load grows. A 3(16) fiduciary keeps that complexity from becoming personal exposure.
Named fiduciary roles are central to how PEPs are structured. Nydia’s 3(16) services complement its work supporting Pooled Plan Providers.
A 3(16) fiduciary is a party formally named as the plan administrator under ERISA Section 3(16), taking on defined administrative responsibilities for a retirement plan. This is distinct from the plan sponsor role and from investment fiduciary roles under ERISA Sections 3(21) and 3(38).
A 3(16) fiduciary handles plan administration, such as filings, distributions, and notices. A 3(21) fiduciary advises on investments while the sponsor retains final say. A 3(38) fiduciary takes on full discretionary authority over investment decisions.
No. Naming a 3(16) fiduciary shifts responsibility for the specific administrative functions defined in the engagement. Plan sponsors retain oversight of the plan and remain responsible for any functions outside that defined scope, including prudently selecting and monitoring the 3(16) fiduciary itself.
PEPs are structured around named fiduciary roles as part of their design. A 3(16) plan administrator is a standard part of how these arrangements operate.
Nydia structures each 3(16) engagement around a defined set of administrative functions agreed to with the plan sponsor, which can include Form 5500 filing, distribution approvals, notice oversight, and correction of operational errors.
Plan sponsors can schedule a consultation with Nydia to review their current plan administration, identify which functions make sense to name Nydia as the 3(16) fiduciary for, and structure the engagement accordingly.