What is Plan Sponsor?
A ‘Plan Sponsor’ is the term used to refer to an entity that sponsors the employees’ benefits which they receive along with their compensation package. The plan sponsors are generally employers; however, it might also be trade unions, the government, or any other third party providing these services.
The plan sponsors are in charge of developing a benefit plan for the employees, drafting the policies governing them, disbursing the benefits for the entitled employees, as well as making sure that nobody misuses the benefits for their own personal gain.
Plan sponsors might in turn hire a third party to monitor the aforementioned duties pertaining to the benefits while taking care of the monetary aspect by themselves.
