Understanding the 3(38) Investment Manager

Understanding the 3(38) Investment Manager

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The Employee Retirement Income Security Act of 1974 (ERISA) sets forth the requirements under which defined contribution plans, such as 401(k)s and 403(b)s, must be managed for the benefit of the plan participants. The catch-word that has been the subject of various lawsuits is fiduciary responsibility. Employers and plan sponsors who have not taken the proper steps to mitigate their liability with respect to the provisions of Section 404(a) of ERISA run the potential for drawn out litigation and the financial risk associated with failing to adhere to the “Prudent Person Rule.” This requirement may cause you to consider whether you wish to continue to assume the role of a Section 3(21) plan fiduciary or outsource investment oversight to a Section 3(38) investment manager.

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Five Ways to Effectively Promote Employee Financial Wellness

Five Ways to Effectively Promote Employee Financial Wellness

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Research from Northwestern Mutual’s Planning & Progress Study revealed that a solid third of all American adults have less than $5,000 put aside for their golden years. One of the biggest contributing factors to this low retirement savings rate is the lack of financial knowledge and general practice of saving, budgeting and investing. According to the American Psychological Association, money is reported to be a top source of significant stress among Americans. When people struggle to save for short-term emergencies, they’re unlikely to prioritize saving for retirement—which, for many, is an amorphous concept that may be decades away. Without education on how to avoid debt, select investments, or prioritize saving for retirement, employees may feel ill-suited to make their own investment decisions, even when it comes to taking advantage of the employer match. As a result, employers who promote employee financial wellness on a holistic basis are far more likely to see increased participation in workplace benefit programs.

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Best Practices for Your OCIO Search

Best Practices for Your OCIO Search

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For generations, successful endowments, foundations, and non-profits used in-house chief investment officers (CIOs) to direct their investment programs. But in today’s market, this approach has become challenged by the complexity of available asset solutions and limitations of resources. The Outsourced Chief Investment Officer (“OCIO”) model has become a way of life to many endowments and foundations globally, and many boards have found that outsourcing the CIO role provides them with far more flexibility and a higher level of skill at a lower cost. We have outlined the best practices for conducting an OCIO search.

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The Basics of Retirement Plan Hardship Distributions and Recent IRS Changes

The Basics of Retirement Plan Hardship Distributions and Recent IRS Changes

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Retirement plans can offer a few options regarding early access to saved funds. Under many employer-sponsored retirement accounts, plan participants may have been offered two early distribution options. One was under a hardship qualification and the other, if allowed, was a loan against the amounts they had vested in the plan. It’s important to understand what hardship distributions and loans are and how the funds may be used.

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Five Ways to Increase Millennial Participation

Five Ways to Increase Retirement Plan Participation Among Millennials

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Millennials — loosely defined as those born between 1981 and 1996 — are quickly becoming the largest generation, slated to surpass Baby Boomers later this year. But unlike Boomers, many of whom are exiting the workforce with the proverbial three-legged retirement stool at their disposal (i.e. defined benefit plan, defined contribution and personal savings, and Social Security), the majority of Millennials haven’t saved a penny for retirement and likely do not have a pension plan, which makes it critical for plan sponsors to make efforts to increase millennial participation.

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