Definition of Plan sponsor:
A plan sponsor is a designated party—usually a company or employer—that sets up a healthcare or retirement plan, such as a 401(k), for the benefit of the organization's employees. The responsibilities of the plan sponsor include determining membership parameters, investment choices, and in some cases, providing contribution payments in the form of cash and/or stock.
The party that is responsible for administering an employee benefit plan.
Some companies offer retirement savings plans, pension plans, or health plans to their employees as part of their employee benefits program. These companies are referred to as plan sponsors. Employers are typically plan sponsors, but unions and professional bodies could also be plan sponsors.
How to use Plan sponsor in a sentence?
- A trust company or trustee provides custodial services and holds the actual investment assets in a trust fund for the employees. .
- A plan administrator is responsible for managing the day-to-day affairs and the strategic decisions involved with a group's retirement plan.
- Plan sponsors usually hire investment advisors to recommend an investment or course of action for one or multiple retirement plans.
- A plan sponsor should be up to date on any annual changes to retirement or healthcare plans, including cost-of-living adjustments.
- Plan sponsors may outsource some duties to plan administrators, trust companies, and investment advisers.
Meaning of Plan sponsor & Plan sponsor Definition