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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2018 Year-End Checklist for Plan Sponsors

2018 Year-End Checklist for Plan Sponsors

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As the end of the year approaches, plan sponsors must ensure that they are preparing for proper adherence to regulatory and legislative requirements. ERISA compliance can be a tedious, complicated, and time-consuming process. The following plan sponsor checklist will help cover some of the most important aspects that all sponsors should keep in mind to make the year-end process less challenging.

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Understanding Fiduciary Roles: 3(21) vs 3(38)

Understanding Fiduciary Roles: 3(21) vs 3(38)

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Due to ERISA’s increased standard of care, the now defunct DOL rule and other potential regulatory replacements, plan sponsors are faced with the heightened importance to understand the fiduciary roles and responsibilities for their retirement plan. Below, we have outlined the ways of becoming a fiduciary, the differences between ERISA 3(21) and 3(38), and which is best depending on your plan and plan committee(s).

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