Any named employee can be the plan administrator, but it recommended that a named title, or the name of the company or organization be used. The Board of Directors of the company then assigns the day-to-day administrative responsibilities of the plan administrator to a specific corporate officer, such as the VP of Human Resources, who has the authority to make decisions and interpret plan provisions on behalf of the company.
Under ERISA, the plan administrator has specific fiduciary rights and responsibilities; therefore by designating the company as the administrator, the company can ensure that the appropriate person is chosen to enforce and interpret those rights and duties. The plan administrator, in their own capacity, must have two opposing roles. As a fiduciary of the plan, they must act in the best interest of the participants and make all decisions in a fair manor on their behalf. At the same time, as an officer of the company, he or she must also take into consideration the company’s position. Depending on the complexity of the plan, this can be difficult position for any employee. A company can be named as both the Plan Sponsor and the Plan Administrator.