A document that provides important information about a mutual fund, including the fund’s objectives, investments, risk level, and expenses and fees. Be sure to carefully review the prospectus before you invest in a mutual fund.
Letter: P
Plan sponsor
An employer that offers a 401(k) plan to employees. The plan sponsor chooses the 401(k) plan, the plan provider, and the plan administrator.
Plan provider
A financial services company that provides your 401(k) plan’s investments. It could be a mutual fund company, a brokerage firm, or an insurance company. Plan providers also offer plan administration and recordkeeping services, though your employer may hire a separate company to act as plan administrator.
Plan participant
An employee or former employee who participates in a 401(k) plan.
Plan fiduciary
Any individual or group who makes decisions in administering and managing the 401(k) plan or who has the power to control the plan’s assets. Under federal law, fiduciaries are subject to certain standards, called fiduciary responsibilities, because they act on behalf of plan participants.
Plan administrator
The company or person selected by your employer to manage the 401(k) plan. The plan administrator could be your employer (an HR manager or benefits department manager, for example), or it may be an outside company hired for the purpose.
The plan administrator manages the day-to-day operations of the plan, including enrollment, investment selection, loans and withdrawals, and distribution requests. The plan administrator is usually the best starting point for questions you have about your company’s plan.