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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Addressing Conflicts of Interest

Addressing Conflicts of Interest

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In today’s ever-changing regulatory environment, there is increasing pressure on retirement plan sponsors (from the DOL) and their plan advisors (from the SEC) to address conflicts of interest. The ultimate goal of the new guidelines is to protect your retirement plan participants. More specifically, the DOL and SEC want your employees to receive unbiased advice and to be protected from paying unreasonable fees.

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Defined Contribution Plan Concerns for 2019

Defined Contribution Plan Concerns for 2019

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As 2018 comes to a close, plan sponsors will want to make sure they understand the current landscape in the retirement plan industry along with potential concerns they may face for the coming year. With more scrutiny over fiduciary roles, it is important to be pro-active and actionable. However, many sponsors don’t realize that there are greater responsibilities beyond setting up and maintaining the retirement plan program. We have outlined the common concerns for 2019 that plan sponsors share regarding their defined contribution plans.

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Best Practices for Managing Participant Data

Best Practices for Managing Participant Data

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Plan sponsors could save a lot of time, expense and stress by implementing a thorough system for managing participant data. Having the appropriate procedures in place can limit potential liability in an audit. Most companies don’t realize the pertinence of maintaining adequate, compliant records until there is a need.

Practicing good recordkeeping is nothing new, as ERISA has declared it a fiduciary responsibility from the beginning. Now, both the Department of Labor (DOL) and the Internal Revenue Service (IRS) are focusing on the requirement of locating missing participants. That makes it even more critical to not wait until an audit to start properly managing your data. Below are a few practical steps to locate missing participants (and beneficiaries). In addition, automatic rollovers can help plan sponsors ensure accurate participant records.

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Cybersecurity: Are Your Plan Participants Protected

Cybersecurity: Are Your Plan Participants Protected

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Advancements in technology have now made it possible to instantly and conveniently access online accounts to retrieve personal information, such as retirement plan savings data. As smartphones and other devices make it easier to obtain electronic documents, plan participants expect to have instant access to their retirement plan records. Yet, security is paramount in this new era, and retirement plan cybersecurity is especially vital. Any electronic recordkeeping today raises cybersecurity concerns and presents new risks for plan sponsors and their participants. It is no longer an issue of if a problem may arise, but likely when it will arise. Learn the risks as well as pertinent precautionary measures on how to protect your plan participants.

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