Fiduciary 3(21) and 3(38) Services
As a business with an employer-sponsored plan, there are many responsibilities that come along with that plan. Every plan must have a fiduciary, which is defined as an individual or entity responsible for the plan’s fund choices, ensuring that they are in the best interests of the participants. Fiduciary duties can be a great deal of work, including such diverse tasks as fund lineup selection, monitoring investment performance and making changes when necessary, running regular benchmarks to make sure that participant fees are within a reasonable range, and meeting to make decisions about the plan lineup and fees.
Almost 43% of plan sponsors are unaware of the fact that they have this responsibility, and that there is an aspect of personal liability in cases of poor plan performance. To avoid litigation and ensure your employees are optimizing their plan participation, Wall Street Alliance Group can help you manage the fiduciary services relating to your business’ plan. We have experience and expertise in this arena, and we are able to serve in both capacities defined by ERISA regulations, 3(21) and 3(38).
A 3(21) fiduciary is an investment advisor and acts as a co-fiduciary with the company fiduciary of your business. In this capacity, we would help you with the fund lineup, review your selections, and make our recommendations, but without discretionary authority. The company fiduciary would be making the final decisions, as well as accepting the liability for performance and fees.
A 3(38) fiduciary takes a more active role, becoming the investment manager of the plan. If we act in this capacity, we can accept most of the responsibility for the plan. This means we will make the final decisions about the fund lineup and implement those choices, then we will manage those investments in an ongoing, regular manner.
We will work with you to decide which of these fiduciary roles you need with your unique situation. Every business is different, and we want to make sure we have the best fit with your plan possible. Whether you need plan menu advice but prefer to take a more active role in your plan, or you would like to maximize the time spent on your business rather than on investment decisions for your company’s plan, we can help you service your plan and optimize the benefits for both you and your employees.
